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What are the rules for Form 1116 foreign income credit carry back and carry forward?

Article ID: 34227  

Question
What are the rules for Form 1116 foreign income credit carry back and carry forward?

Answer

You can carry back 1 year and then forward 10 years any foreign tax you paid or accrued to any foreign country or U.S. possession  that is more than the limitation. First, apply the excess to the earliest year to which it may be carried. Then, apply it to the next earliest year, and so on. The carryback-carryforward period cannot be extended even if you are unable to take a credit in one of the intervening years.

Special rules apply to the carryback and carryforward of foreign taxes paid or accrued on foreign oil and gas extraction income. See section 907(f).

File Form 1040X or other amended return and a revised Form 1116 for the earlier tax year to which you are carrying back excess oreign taxes.

More information. See Pub. 514 for more information on carryback and carryforward provisions, including examples.


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