1040-US: Elect exemption from foreign tax credit limitation (suppress Form 1116 when eligible)

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Question

How do I make the election for exemption from the foreign tax credit limitation?

Answer

Enter X in the Elect Exemption from Foreign Tax Credit Limitation field in Screen B&D. When this election is made and Screen 1116 contains only qualified passive income with creditable foreign taxes of no more than $300 ($600 if married filing jointly), it is assumed Form 1116 is not required to be filed and this form does not calculate. In addition, the tax application does not calculate or use carryovers from or to the current tax year.

Note: The tax application ignores this election and prints Form 1116 if more than one category of income is present or if the total creditable foreign taxes exceed the eligibility threshold of $300 ($600 if married filing jointly).

You can also override (force) the calculated foreign tax credit exempt from the limitation. Enter an amount in the Amount exempt from foreign tax credit limitation (Force) field on Screen B&D in the Income folder. Amounts entered here are reported on Form 1040, Page 2 without review of exemption requirements.

Related topic: Foreign tax credits and earned income FAQs (1040)

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