Form 1116 - Multiple 1099-DIVs Additional Calculation Limitation

When there are multiple entries coming from separate Forms 1099-DIV Dividends and Distributions in a return, all the entries are consolidated into one single column on Form 1116 Foreign Tax Credit. In the IRS Instructions for Form 1116, starting on page 7, are instructions that apply. When there are Qualified Dividends or Capital Gain Distributions within the return, there is an additional calculation (special limitation) that needs to be done to determine the amount to include on Line 1a of Form 1116. The instructions to do this calculation starting in the "Foreign Qualified Dividends and Capital Gains (Losses)" section in the instructions.

This limitation calculation is done for you automatically by the TaxAct program if you enter the Forms 1099-DIV information in the program and let that flow to Form 1116. If you manually complete Form 1116, you need to ensure the amounts are entered correctly for Lines 1a and 3d in Part I and Lines A, B, and C in Part II. If there is not a need for the limitation calculation, you will normally find those lines to be calculated from:

  • Part I, Line 1a - Boxes 1a and 2a of Forms 1099-DIV
  • Part I, Line 3d - Boxes 1a and 2a of Forms 1099-DIV
  • Part II, Lines A, B and C - Box 6 of Forms 1099-DIV

Please note that Line 1a will differ from Line 3d if the limitation calculation is required.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.