@msindc1 

When completing the Foreign Tax Credit using the Dividend screen there are a few things to keep in mind.  

1. Make sure you've set up a basic 1116 income category item in Screen 35.1. Enter the name of the foreign country, and the category of income. No further information needs to be entered here at this point (though options are available for certain scenarios when needed).

2. In Screen 16, once you've entered your details for Federal and State, scroll down to the Foreign Tax Credit section.

3. In this section you'll first tie this dividend item to the applicable 1116 set up in Screen 35.1.

4. In the fields below you will make the following considerations:

a. "Percentage foreign (.xxx) or amount, if different - Total Ordinary Dividends" - If this is left blank, the program default will assume 100% of the Total Ordinary Dividends entered above are considered Foreign.  If this is not the case, enter either a percentage (.xxx) or the dollar amount that is considered Foreign (-1 = none).

b. "Percentage foreign (.xxx) or amount, if different - Qualified Dividends" - If this is left blank, the program default will assume 100% of the Qualified Dividends entered above are considered Foreign.  If this is not the case, enter either a percentage (.xxx) or the dollar amount that is considered Foreign (-1 = none). (note: if no qualified dividends were entered above, you can leave this blank to match Federal)

c. "Percentage foreign (.xxx) or amount, if different - Capital Gain Distributions" - If this is left blank, the program default will assume 100% of the Capital Gain Distributions entered above are considered Foreign.  If this is not the case, enter either a percentage (.xxx) or the dollar amount that is considered Foreign (-1 = none). (note: if no capital gain distributions were entered above, you can leave this blank to match Federal)

5. Foreign income tax withheld (foreign currency) or Foreign income tax withheld (U.S. dollars)" enter your foreign income tax withheld here.

a. If the income tax withheld is reported as foreign currency, enter the amount in 'foreign currency' and 'U.S. dollars' and complete the "Foreign currency conversion (Ctrl+E)" input field in Screen 35.1, Foreign Taxes Paid or Accrued.

b. If the income tax withheld is reported in US dollars, enter the amount in 'U.S. dollars' only.

6. (if applicable) Check the box for Foreign taxes accrued if you have chosen to take a deduction for the foreign taxes accrued, as apposed to paid. This will mark the "Accrued" box on Part II of Form 1116.

7. (if applicable) Check the box for 1099 taxes.

8. (if applicable) Enter the Date paid or accrued (if not 1099 taxes). If the dividend item relates to Form 1116, enter in the respective input fields the percentage (in .xxxx format) or amount related to the foreign account, income tax withheld (foreign and U.S.), and the date (in m/d/y format) the tax was paid. The program includes dividends entered in gross income.

Step 4a, 4b, and 4c is where you can run into adjustment issues on the 1116 if these are not filled out correctly. Always start with the default amount printed above, then adjust as needed.