Is it correct to report Foreign tax paid in 1099-div to line 47 Foreign tax credit in 1040 form?

But here http://voices.yahoo.com/how-report-amounts-form-1099-div-2439-11819489.html?cat=3 it says that

Any foreign tax paid by the mutual fund or REIT would be reported in box 6. You could claim this tax as an itemized deduction on Schedule A or as a credit on Form 1116.


1 Answer 1


You can always take deduction for foreign tax paid on Schedule A, or calculate foreign tax credit using form 1116. Credit is usually more beneficial, but in some cases you will be better of with a deduction.

However, in very specific cases, you can claim the credit directly on your 1040 without using the form 1116. Look at the 1040 instructions for line 47:

Exception. You do not have to complete Form 1116 to take this credit if all of the following apply.

  • All of your foreign source gross income was from interest and dividends and all of that income and the foreign tax paid on it were reported to you on Form 1099-INT, Form 1099-DIV, or Schedule K-1 (or substitute statement).

  • The total of your foreign taxes was not more than $300 (not more than $600 if married filing jointly).

  • You held the stock or bonds on which the dividends or interest were paid for at least 16 days and were not obligated to pay these amounts to someone else.

  • You are not filing Form 4563 or excluding income from sources within Puerto Rico.

  • All of your foreign taxes were:

    1. Legally owed and not eligible for a refund or reduced tax rate under a tax treaty, and

    2. Paid to countries that are recognized by the United States and do not support terrorism.

    For more details on these requirements, see the Instructions for Form 1116.

  • 1
    Note that the above Exception may hold true for more filers than one might initially think. For example, if one's only exposure to foreign income is a handful of mutual funds with a total balance under, say, 200K USD, then it's quite likely that the foreign tax paid on the funds' earnings in a given year will sum to less than 300 USD.
    – dg99
    Commented Apr 21, 2014 at 22:37

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