Skip to main content
023d02h45mStart the scan
Atamataxatamatax.

Glossary

FTC (Foreign Tax Credit, Form 1116)

Dollar-for-dollar credit (up to a per-category limit) for income tax paid to a foreign country.

Form 1116 computes the Foreign Tax Credit, claimed by category (passive, general, etc.). The credit is capped at the US tax on the foreign-source income in that category. Carryover is one year back and ten years forward. Many expats benefit more from FTC than FEIE when the foreign rate exceeds the US rate; the two can be combined but not on the same income.

Related

This glossary entry is general reference, not advice for your specific return. Start your filing on the residency step.