Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Foreign Tax Credit and Completing Form 1116

Who and When

Who May Take the Credit?

Foreign Tax Credit and Puerto Rico Residents

U.S. citizens who live in Puerto Rico compute both their U.S. taxes and their Puerto Rican taxes based on their worldwide income.

These taxpayers may take the foreign tax credit to reduce their U.S. tax liability.

More Information

Foreign tax credit, like other nonrefundable credits discussed in the Basic and Advanced Courses, is a dollar-for-dollar reduction in the amount of tax. However, in some cases, not all taxes paid to a foreign government can be used in the computation of the foreign tax credit.

Map of Puerto Rico