Fill out Form 1116 (Foreign Tax Credit) online
Form 1116 is used to claim a tax credit for income taxes paid or accrued to a foreign country or U.S. possession. The foreign tax credit reduces your U.S. tax liability on foreign-source income, preventing double taxation on the same income.
How to fill out Form 1116 (Foreign Tax Credit)
Identify the category of income
Determine which category of foreign-source income applies: general category, passive category, or other specific categories listed on the form. File a separate Form 1116 for each category.
Calculate foreign-source taxable income
Enter your gross foreign-source income for the category and subtract any definitely allocable deductions. This determines the taxable income from foreign sources used to calculate the credit limitation.
Enter foreign taxes paid or accrued
Report the foreign income taxes paid or accrued during the tax year. Convert amounts in foreign currency to U.S. dollars. Include taxes withheld at source and taxes paid directly to foreign governments.
Compute the foreign tax credit limitation
Calculate the maximum credit allowed by multiplying your U.S. tax liability by the ratio of foreign-source taxable income to worldwide taxable income. The credit cannot exceed this limitation.
About Form 1116 (Foreign Tax Credit)
Who needs this form
U.S. citizens, resident aliens, and nonresident aliens who paid or accrued income tax to a foreign country or U.S. possession and want to claim a credit against their U.S. federal income tax. This includes individuals with foreign wages, investment income, or business income that was taxed abroad.
Where to submit
Attach Form 1116 to your Form 1040 or 1040-SR when filing your annual federal income tax return. A separate Form 1116 must be completed for each category of foreign-source income.
Source and content freshness
- Reviewed: 2026-02-24
- Filing deadlines may shift for weekends and holidays. Verify due dates with official instructions.
Common mistakes to avoid
- Not separating income into the correct foreign tax credit limitation categories (general, passive, etc.)
- Claiming a credit for taxes paid to a country with which the U.S. has no tax treaty or that are not creditable income taxes
- Failing to convert foreign taxes to U.S. dollars using the correct exchange rate
- Not carrying forward or back unused foreign tax credits when the limitation applies
Frequently asked questions
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Should I take a credit or a deduction for foreign taxes?
In most cases, claiming the credit on Form 1116 is more beneficial because it directly reduces your tax liability dollar for dollar, whereas a deduction only reduces taxable income. However, if your foreign taxes are small, you may elect to claim the credit without filing Form 1116 by reporting the total on Schedule 3. This simplified election is available if all foreign taxes were reported on qualified payee statements and your total creditable foreign taxes do not exceed $300 ($600 if married filing jointly).
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