Foreign Tax Credit (Form 1116) Calculator
U.S. citizens with foreign-source income (wages, dividends, interest) can claim a dollar-for-dollar Foreign Tax Credit against U.S. tax. Calculate your FTC limit, current-year credit, and carryforward.
| Foreign-source ratio | — |
| FTC limit (US tax × ratio) | — |
| Foreign tax paid | — |
| FTC allowed (lesser of paid or limit) | — |
| Net U.S. tax after FTC | — |
| Excess credit (carryforward 10 years) | — |
The Foreign Tax Credit (FTC) is a dollar-for-dollar U.S. tax credit for income taxes paid to a foreign government. Filed on Form 1116, it prevents double taxation when a U.S. citizen earns income that's taxed both abroad and in the U.S. The credit is capped at the U.S. tax that would otherwise apply to the foreign-source income — excess can be carried back 1 year and forward 10.
How the FTC Limit Works
The limit formula: U.S. tax × (foreign-source taxable income / total taxable income). If you owe $40K U.S. tax with 40% foreign income, the FTC limit is $16K. You can credit up to $16K of foreign tax paid against U.S. tax — anything above becomes a carryforward.
Income Baskets
FTC limits apply per basket: (1) General: wages, self-employment, business income. (2) Passive: dividends, interest, royalties, capital gains. (3) Foreign Branch: foreign branch operations. (4) GILTI: global intangible low-taxed income. Baskets cannot offset each other — excess in passive can't credit against general.
FTC vs FEIE
FTC wins when foreign tax rate > U.S. rate (Germany 45%, Norway 47%, France 45%, Australia 45%). FEIE wins when foreign tax rate < U.S. rate (Dubai 0%, Bahamas 0%, Singapore 0-22%). FTC also covers investment income; FEIE only covers earned income.
Last updated May 2026. Sources: IRS Form 1116, IRS Pub 514 Foreign Tax Credit.