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

Foreign Tax Credit

Election To Claim Foreign Tax Credit Without Filing Form 1116

Who qualifies?

Taxpayers who receive Form 1099-INT or Form 1099-DIV may have amounts reported indicating that foreign taxes have been paid on their behalf by the issuer of the document.

Taxpayers can elect to report foreign tax without filing Form 1116 as long as the following conditions are met.

  • All of the gross foreign source income was from interest and dividends and all of that income and the foreign tax paid on it were reported on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute statement).
  • If you had dividend income from shares of stock, you held those shares for at least 16 days.
  • You are not filing Form 4563 or excluding income from sources within Puerto Rico.
  • The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly).
  • All of your foreign taxes were:
    • Legally owed and not eligible for a refund, and
    • Paid to countries that are recognized by the United States and do not support terrorism.

If the foreign tax paid is more than $300 ($600 for Married Filing Jointly) or they do not meet the other conditions to make the election, taxpayers must file Form 1116.

Refer taxpayers who must complete Form 1116 because they cannot qualify for the election to a volunteer with an International certification or a professional tax preparer.

Tip

A credit for foreign taxes can be claimed only for foreign tax imposed by a foreign country or U.S. possession.

Tax software hint.

Review the Volunteer Resource Guide, Nonrefundable Credits tab, for more information about Form 1116, claiming the foreign tax credit using the simplified election.

Form 1116 Instructions

Form 1116 Instructions