Margaret CPA in OH Posted March 3, 2022 Report Posted March 3, 2022 In running a Check Return today a red error message said that Form 1116 Schedule(s) B must be attached as a PDF... I've never seen this before. There was only a $48 co from 2020 so this seems overkill. I see the amount for the first preceding year on Sch. B but cannot fathom why this isn't part of the transmitted 1116. Might someone clue me in, please? I've had many clients with these carryovers and never saw this before. Quote
Lee B Posted March 3, 2022 Report Posted March 3, 2022 If you elected not to file 1116 last year, if you have a carryover is it allowed? Quote
Margaret CPA in OH Posted March 3, 2022 Author Report Posted March 3, 2022 Oh we've filed 1116 every year. They always have ftc with their investments. I guess I can do this but am baffled that it apparently is not a part of the 1116 that would be e-filed, too. I mean, it's page 3 of the form, not a separate schedule. Sigh... at least the part-year resident thing got fixed. Small victories. Quote
jklcpa Posted March 3, 2022 Report Posted March 3, 2022 Sch B is new for 2021. I'd guess that IRS has decided to not devote the resources for the testing through e-file and is instead requiring the pdf. The 1116 instructions say that Sch B replaces the required attachment for line 10 that was needed in prior years. 4 Quote
jklcpa Posted March 3, 2022 Report Posted March 3, 2022 Is ATX creating the attachment for you? I haven't had one yet with a c/o, but did play around in a return to see that my software is giving the same warning that an attachment is needed. I didn't go so far as to see if the software actually creates it automatically for me to link the attachment to the e-file. It does create a pdf of nonresident returns required for attachment to claim the out-of-state credit on the resident state. 1 Quote
Abby Normal Posted March 3, 2022 Report Posted March 3, 2022 58 minutes ago, cbslee said: If you elected not to file 1116 last year, if you have a carryover is it allowed? Yes. This has always been the case. When foreign tax is below the $300 single, $600 joint limits that allow you to not include the 1116, you were still supposed to complete the 1116 to do the calculations, but you could check the box to not send the form to the IRS. I think most of us just skipped the 1116 most of the time, to save time. 2 Quote
Margaret CPA in OH Posted March 3, 2022 Author Report Posted March 3, 2022 Alas, the message says to create the pdf to attach. So guess I will do that. These folks have always, to my recollection, had more than $600 ftc. They are from Germany and I think some of their investments reflect interest in more global investments. 1 Quote
TexTaxToo Posted March 4, 2022 Report Posted March 4, 2022 If someone has an insignificant amount of carryover, do you think they can ignore it (never use it) and not file Schedule B? I also wonder about the requirement to carry back one year. If someone has never needed to file Form 1116, but must file it this year and have c/o, is it correct that they must first amend last year's return to add Form 1116 and use any c/o there? If they choose not to amend, then they just lose the c/o? They cannot take it next year? Thanks! 1 Quote
jklcpa Posted March 4, 2022 Report Posted March 4, 2022 Maybe I'm missing the logic, but if the software is creating Sch B, it seems a straightforward process to print the Sch B as a single pdf and then attach it to the e-file. If the process is this easy, why suggest forgoing taking the credit? Also, if the taxpayer is able to utilize the credit carryover in the current year, then the credit would not be available in a future year just because someone decided to skip a year. Example: If one did skip 2021 when the credit c/o could have been used, the credit coming forward in the following year of 2022 would still have to be reduced by should have been used in 2021. 2 Quote
jklcpa Posted March 4, 2022 Report Posted March 4, 2022 There also is no election to forgo the carryback of FTC like exists for NOLs. That seems ridiculously stupid to me that taxpayers whose unused credits are small must file amended returns. 3 1 Quote
mcbreck Posted March 4, 2022 Report Posted March 4, 2022 I wonder when the last time was that they increased that $300 threshold. That figure should be more like $1,500 per person on dividends and interest reported on a 1099. At least most 1099's are now breaking out foreign dividends paid so I don't have to spend 20 minutes searching for them and adding them up. 3 Quote
Abby Normal Posted March 4, 2022 Report Posted March 4, 2022 2 hours ago, mcbreck said: when the last time was that they increased that $300 threshold We desperately need a tax law that indexes EVERY amount in the tax code to inflation. I swear the $25 business gift limit has been that way since the 1960s or earlier. 5 Quote
Jim Oh Bkkr Posted March 5, 2022 Report Posted March 5, 2022 Taxable SS at 25K/32K have been that way my entire career. And I've been at this since '88. And just to stay "on topic", I have a kid living off of an inheritance who has this FTC problem for a couple of years. Reporting the c/o is a pain, and will (probably) never benefit him. 5 Quote
joanmcq Posted March 15, 2022 Report Posted March 15, 2022 Margaret, did you get the return to efile? I just had one reject and it said I had to attach the Sch B and something else and 951A must not be checked. Thing is I did attach the Sch B! None of the other things mentioned were applicable. Quote
jasdlm Posted March 15, 2022 Report Posted March 15, 2022 7 minutes ago, joanmcq said: Margaret, did you get the return to efile? I just had one reject and it said I had to attach the Sch B and something else and 951A must not be checked. Thing is I did attach the Sch B! None of the other things mentioned were applicable. I have had multiple rejects for 1116 (even though not caught in error check) for returns with NO carryforward. It's crazy annoying. Quote
Margaret CPA in OH Posted March 15, 2022 Author Report Posted March 15, 2022 10 hours ago, joanmcq said: Margaret, did you get the return to efile? I just had one reject and it said I had to attach the Sch B and something else and 951A must not be checked. Thing is I did attach the Sch B! None of the other things mentioned were applicable. Yes, it did go through once I added Sch. B. I did check to print to pdf both pages (3 and 4) as B carries over. I missed that the first time. I did not get any message about 951A - no clue what that is. Just had Passive Income at the top. I've got another coming up later this week and hoping it will go through, too. Stay tuned! 2 Quote
joanmcq Posted March 16, 2022 Report Posted March 16, 2022 I sent it a second time and it accepted. I have no idea why it rejected the first time. Quote
BulldogTom Posted March 31, 2022 Report Posted March 31, 2022 Thank you all for this thread. I knew I read about this somewhere and reading it again helped me figure out what I needed to do. Tom Longview, TX 1 Quote
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