I will potentially be getting a large payment from a foreign pension plan which will be taxable in that country. When I run the numbers through Turbo Tax the amount of FTC is limited in the current year, but I don't see any way to carry forward the unused portion to future years. Is this a problem in TT or am I not filling in the information correctly?
Here is a great TurboTax article which may help you: The Federal Foreign Tax Credit.
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Thanks for the response but my issue is that within TT it restricts the FTC to the maximum amount that can be claimed in the current year, but from what I can see the balance doesn't get shown as a carried forward amount. How can I use TT to either claim the balance in the current year or carry it back to previous years?
The carry-forward rules are only if you paid tax on foreign business income. For other income, any foreign tax that’s not recovered by the tax credit can be used as a s. 20(12) deduction on line 23200 (other deductions).
In TurboTax Download, you can do this in Forms mode. If you are not already in Forms mode, click the Forms icon in the blue icon bar. Then click the Forms icon again. Search for “Foreign Tax Credits Worksheet”. You can enter your 20(12) deduction on the 8th line down, in the column of the country that it applies to.
To return to EasyStep Mode, click the EasyStep icon in the blue icon bar.