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

Foreign Tax Credit and Completing Form 1116

Completing Form 1116

Part II

Amount of Qualified Foreign Taxes

Use Form 1116, Part II, to establish the amount of qualified foreign taxes paid or accrued during the year.

This table has directions for filling in each line in Part II.

Column(s) Directions

Checkbox j or k

Indicate in the checkbox whether the taxpayer is claiming paid or accrued taxes.

l

Report date taxes were paid or accrued. For cash basis taxpayers using the accrual method, enter the last day of this tax year.

m through p

Skip these columns for taxpayers who are claiming foreign taxes paid or accrued in U.S. dollars. These lines are for taxpayers who paid foreign tax in foreign currency.

q through t

Use columns q through s for taxes withheld at source on dividends, rents and royalties and interest. Use column t for taxes paid or accrued for wages and pensions.
More Information

Taxpayers, including cash basis taxpayers, can take the foreign tax credit in the tax year paid or accrued. Under the accrual method, Puerto Rico taxes are determined as of December 31 of the tax year. Most U.S. government employees who live in Puerto Rico use the accrual method to determine their foreign tax credit because their Puerto Rico tax liability is not calculated until they complete their Puerto Rico tax return after the end of the year.

Form 1116, Part II.