Case Study 1: FTC Without Form 1116
Ryan, who is single, received Form 1099-DIV that shows $29 of foreign taxes paid. According to Ryan, he received no other foreign source of income and paid no other foreign taxes. The dividends were paid on shares of a mutual fund that he owned all year. He is eligible to claim the $29 foreign tax credit on Form 1040, page 2, and does not have to file Form 1116.
Taxpayers can elect to report foreign tax without filing Form 1116 as long as the following conditions are met: