There can be several reasons that the Foreign Tax Credit may not be calculated in you return:
- Foreign taxes that are not applied to you by a foreign country or U.S. possession
- Taxes paid to the U.S. Virgin Islands (Form 8689 will be used instead)
- Taxes on excluded foreign earned income or housing costs do not qualify for this credit
- Tax paid to a country you do not legally owe
- If you are paying taxes to a foreign country that supports international terrorism, you will not receive this credit. Use this link for a list of countries with this status: https://www.state.gov/state-sponsors-of-terrorism/
- If you have reported Dividend Income and this is the only foreign income that is subject to tax, review your entry to ensure it is listed under the passive income section of the form (1116), rather than reporting this amount under the general limited income area
- Nonresident Alien status does not qualify to take this credit
For additional information, visit these IRS links: