Question

New rule for RIC foreign tax paid

Forum|Forum|1 year ago
March 5, 2025
1 reply
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Dear Turbo, in previous years, I could easily fill my VGD foreign tax paid (to skip Form 1116) & got my tax credit, but in 2024, I have $328 RIC foreign tax paid (from VGD 1099-Summary), which is more than the $300 maximum amt allowed for SINGLE filing, so I must deal with Passive Foreign income/loss (in Form 1116). However, because the $328 resulted from VGD ETFs, I have no clue how to address Form 1116. Pls advise. THX

Mia Chang

AmyC

When filing the 1116:

See how Claiming the Foreign Tax Credit with Form 1116 - TurboTax
Use RIC since ETF Vanguard
Most people use the credit instead of the deduction.

Foreign taxes that qualify for the Foreign Tax Credit states: Mutual fund shareholder

If you are a shareholder of a mutual fund, or other regulated investment company (RIC), you may be able to claim the credit based on your share of foreign income taxes paid by the fund if it chooses to pass the credit on to its shareholders. You should receive from the mutual fund a Form 1099-DIV, or similar statement, showing the foreign country or U.S. possession, your share of the foreign income, and your share of the foreign taxes paid. If you do not receive this information, you will need to contact the fund.