Per the IRS Instructions for Form 1116 Foreign Tax Credit (Individual, Estate, or Trust):
Election To Claim the Foreign Tax Credit Without Filing Form 1116
You may be able to claim the foreign tax credit without filing Form 1116. By making this election, the foreign tax credit limitation (lines 15 through 21 of the form) won't apply to you. This election is available only if you meet all of the following conditions.
- All of your foreign source gross income was “passive category income” (which includes most interest and dividends). See c. Passive Category Income, later. However, for this purpose, passive income also includes (a) income subject to the special rule for High-taxed income described later, and (b) certain export financing interest.
- All the income and any foreign taxes paid on it were reported to you on a qualified payee statement. Qualified payee statements include Form 1099-DIV, Form 1099-INT, Schedule K-1 (Form 1041), Schedule K-1 (Form 1065), Schedule K-1 (Form 1120S), or similar substitute statements.
- Your total creditable foreign taxes aren't more than $300 ($600 if married filing a joint return).
This election is not available to estates or trusts.
To make the election, just enter on the foreign tax credit line of your tax return (for example, Schedule 3 (Form 1040), line 48) the smaller of (a) your total foreign tax, or (b) your regular tax (for example, the total of Form 1040, line 11a and Schedule 2 (Form 1040), line 46. Form 1116 will not print with your return if it is not necessary.
For interest and dividend income, please see the Investment Income section of the Federal Q&A.
If, in the Q&A interview for Form 1116 you re-entered manually any information that already flows automatically from qualified payee statements, and find you need to delete those manual entries:
- From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal
- Click Other Credits to expand the category and then click Foreign tax credit in the Federal Quick Q&A Topics menu
- Click Review next to Manual Input Worksheet
- Continue to the screen titled Foreign Tax Credit - Manually Entered Worksheets and click on the Delete icon on the right side of the screen
- Click OK (Desktop users click Yes) to confirm you wish to delete the form