TurboTax entries for AZ Credit for Foreign Tax Paid

Forum|Forum|2 years ago
February 26, 2024
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I have many Mutual Funds/ ETFs that list Foreign Tax paid on my 1099-Div, and I want to claim this credit, but the entry items in TurboTax are not explained well. Why does TurboTax not import these items into the state return? Do I enter each mutual fund as a 'tax paid' entry with country listed as 'various' ? Under "Taxes Paid to Other State or Country" it requires Total Taxable Income and Total Income Tax, but it does not explain this. Is this asking for the Dividend/ Cap Gains Income from the 1099-Div for the fund in question and the Foreign Income tax withheld, or what?

ThomasM125

You are on the right track. You enter the country the income was earned in, or "various" if there are several of them. On your Form 1099-DIV, the dividends will be listed in box 1. If all of the dividends were earned in a foreign country, then you would enter the full amount of that income as the foreign income. Sometimes your dividend income reported is earned from multiple sources, in which case you will need to look on the supplemental statements attached to the Form 1099-Div to determine what the foreign income amount is.

If all your foreign income and foreign tax was reported on Form 1099-DIV, you would only need to assign the foreign income reported there to a country, or "various" as the case may be. In TurboTax, you will go through each Form 1099-DIV and enter the amount of foreign income reported in box 1. You already entered the foreign tax paid in box 7 when you entered your Form 1099-DIV, you don't need to enter that again. You would only need to enter foreign taxes paid in the foreign tax section if it hadn't been entered elsewhere in the program.

You will see this screen in the Foreign Taxes section: