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 III

Calculate the Reduction in Foreign Taxes

Use Form 1116, Part III, to apply the overall limitation formula. This determines the maximum amount of a taxpayer's foreign tax credit.

The table has directions for filling in all the lines in Part III.

Line(s) Directions

9

Enter the amount of foreign taxes from Part II

10

For foreign taxes transferred from other years, please refer to Publication 514

12

Report the reduction in foreign taxes, if applicable; this is discussed later in this topic

14-21

Calculations to determine the maximum amount of the credit

22

Report the allowable foreign tax credit; this is the lesser of:

  • Line 14: Foreign taxes available for credit
  • Line 21: The limitation

Click here to view Part III of Form 1116.