Level 15

@atif1040 What you stated is not exactly correct.  FTC from your client's employment income (even assuming all of that is foreign sourced), to the extent there are other taxable income, such as dividends in your case, will be limited and CTC would be used to offset the residual liability.

When there's an increase in, let's say, dividend income, that will affect:

  • Line 12a: Overall, there should be an increase in tax due to the additional income;
  • F.1116: Limitation will be adjusted based on the new ratio;
  • CTC: Presumably increased due to higher residual tax from income not eligible for FTC; and
  • ACTC: Presumably reduced due to corresponding increase in CTC, all else being equal.
---------------------------------------------------------------------------------
Still an AllStar