The Foreign Tax Credit is available if you paid taxes to a foreign country on foreign-source income and are subject to U.S. tax on the same income. This credit is intended to relieve taxpayers of a double tax burden. Generally, you must be a U.S. citizen or resident alien to take the credit.
Foreign taxes qualify for the credit if:
Alternatively, you can choose to claim an itemized deduction on Schedule A (Form 1040) Itemized Deductions for the foreign tax paid OR you may exclude up to $112,000 of the foreign earned income from your taxable income using Form 2555 Foreign Earned Income. See Foreign Earned Income Exclusion and Foreign Tax Credit (or Deduction) for more information and instructions for entering the credit, deduction, or exclusion information in TaxAct.
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