Question

Foreign Tax Credit Comp Wks: Excluded FEI - Dedns must be entered.

Forum|Forum|1 year ago
March 26, 2025
1 reply
0 views

I live abroad and have filled out all of the information and upon review I get the following error messages:

and

Form 1116 (COPY 1) -- Foreign Tax Credit Comp Wks: Total FEI - Dedns must be entered.

Where do I get those numbers and why isn't TT transferring the required information to this form?

TurboTax Premier Online

M

Mike9241

Are you filing form 2555 and excluding all your foreign earned income from US taxation? You are not allowed to take claim a FTC on excluded income.

K

KT1974Author

Thanks for your response - I can't exclude all of my income, as I earned about $189k. So I've used the FEIE to exclude the first $126k (or whatever the exact amount is), but I still have income left over. As I understand it, I can use the FTC to reduce my tax liability. I am in Brazil and so I pay 25-30% income tax on all of my income.

SusanY1

You can combine the foreign earned income exclusion with the tax credit, just be sure to calculate the reduction in foreign taxes and enter this number into the Foreign Tax Credit section of TurboTax.

That calculation is determined by dividing the exclusion taken by the total foreign sourced income. Then you multiply the tax paid by that factor, giving you the amount to exclude.

As an example, if you have $126,500 of total income and housing exclusion, $190.000 of foreign earned income, and $55,000 of tax paid it would look like this:

126500/190000=.665789

55,000*.665789=36,618 so the reduction in foreign tax would be 36,618 leaving $18,382 of foreign tax that is considered for the foreign tax credit.

Your numbers won't be this, exactly, of course and TurboTax doesn't do that math for you - but there is an area to enter this "reduction in foreign taxes" which is the amount of tax attributed to excluded income.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"