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Can foreign tax credits be carried forward if the was no taxable income or tax in 2020?

wethepeople
Level 3

I am preparing a return in which there is no taxable income or tax for 2020.

There were some small foreign taxes paid on certain dividends which were reported by the brokers on the Forms 1099-DIV.

My program does not allow these amounts to be carried forward to 2021.

Is this correct which would result  in losing the benefit of the credits?

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8 Replies 8
sjrcpa
Level 15

If you filled out the 1116 they should carryforward. FYI the likelihood of being able to use it is small.

If you elected out of completing the 1116 there is no carryforward.


ex-AllStar
wethepeople
Level 3

I filled out the Foreign Tax Credit Computation Worksheet and at the bottom where it says Foreign Tax Credits Carryover to 2021, it reports the foreign taxes paid in the column titled UTILIZED and zero in the carryover column.

.At the top of Form 1116 it says Form Not Required To Be Filed.

Am I missing something here?

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sjrcpa
Level 15

Sounds like you elected out of filing the 1116. I don't use ProSeries so I don't know how to fix it.


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wethepeople
Level 3

Is there anyone in the community that is familiar with the ProSeries Basic program that might be able to resolve my issues?

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Terry53029
Level 12
Level 12

The program says to enter all info on 1116 worksheet, but that is not entirely true. Go directly to form 1116, line 10, and enter the amount of carryover. That should do it for you. I use ProSeries Pro, but this should work for basic

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wethepeople
Level 3

The foreign taxes are on Line 9 so that when I enter them on Line 10 it shows the total of the two on Line 11.  It then shows this double effect on Line 14  which is described as 'the Total amount of foreign taxes available for credit.'  

Something still seems amiss here.

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Terry53029
Level 12
Level 12

I agree the program is amiss, but if you put the credit on line 10 it will carry forward to 2021 the correct amount, even though it does show on line 11 double the amount. I would override line 11 to reflect the total credit allowed

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wethepeople
Level 3

I get a red error message saying i cannot do that for e-filing.

So I removed the Form 1116 and overrode the section of the Foreign Tax Credit Computation Worksheet that says Foreign Tax Credit Carryovers to 2021 by changing the amount in the UTILIZED column to zero on the 2021 line, It then moves the amount to the CARRYOVER column.

At the top of Form 1116 it says 'FORM NOT REQUIRED TO BE FILED. I'm not sure why this is.

 

Can you report this issue to the technicians at Intuit for more clarity?

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