Need Help with Free Fillable Forms Not Allowing Manual Entry for Foreign Tax Credit on Schedule 3

I'm super frustrated with Free Fillable Forms right now. I'm trying to file my taxes and I can't manually enter an amount into Line 48 on Schedule 3 for my foreign tax credit. Got a 1099-Div with $52 on line 7 for foreign tax paid, and according to the Schedule 3 instructions, my situation is one of those exceptions where I don't need to file Form 1116. But the system won't let me just put the number in! Anyone know how to get around this? Do I really have to fill out the whole Form 1116 just for this small amount? If that's my only option, can someone please explain how to fill out that form for this simple situation? It looks complicated and I'm not sure what all those sections mean. Update: I emailed support about this issue and wanted to share their response in case anyone else runs into this: We became aware of the issue last evening. This software issue is tentatively scheduled to be fixed on February 8. You may always complete Form 1116 to calculate the amount for Schedule 3, line 48. However, Form 1116 has limitations that may prohibit you from properly completing or transmitting your return. Alternatively, you can always print the return, make any needed changes and mail it in. Mailing information is in the instructions for Form 1040. They also mentioned some known limitations with Form 1116 but didn't finish listing them all.

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19 comments

Mateo Hernandez

•8M

This is actually a common issue with Free Fillable Forms this filing season. You're right that if your foreign taxes are $300 or less ($600 if married filing jointly), you can claim them directly on Schedule 3 without Form 1116. For your situation with only $52 in foreign taxes from dividends, you have three options: Wait until February 8 when they say they'll fix the software issue. That's the easiest option if you're not in a hurry to file. Complete Form 1116 despite qualifying for the exception. It's more work, but you'd list your foreign-source dividend income in Part I, categorize it as "passive category income," complete the calculations showing your foreign tax paid in Part II, and carry the result to Schedule 3. Print your return, manually write in the $52 on line 48 of Schedule 3, and mail it in. This is probably the simplest workaround if you don't want to wait. The IRS is having lots of system issues this year with their Free Fillable Forms, so you're definitely not alone with this frustration!

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Mateo Hernandez

•8M

Waiting until February 8 would probably be your best option if you're not in a hurry to file. That's only a week or so away, and it would save you the hassle of dealing with Form 1116. If you do decide to fill out Form 1116 for your $85 in foreign taxes, it's manageable but does require some extra steps. You'd need to categorize your income (likely passive for ETFs), determine your foreign source income percentage, and calculate the limitation. For small amounts like this, you'll almost certainly get the full credit since you're well under the limitation thresholds.

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Ethan Taylor

•8M

After struggling with this exact same problem, I found an amazing solution through taxr.ai (https://taxr.ai). I had a similar foreign tax credit issue with my investment dividends and couldn't figure out if I should wait for the fix or attempt Form 1116. I uploaded my tax documents to taxr.ai and was really impressed. It immediately identified my foreign tax credit eligibility and showed me the exact way to handle the Free Fillable Forms limitation. It even gave me step-by-step instructions for completing Form 1116 correctly if I chose that route instead of waiting. The system explained all those confusing parts about "passive category income" and how to allocate the foreign taxes properly. Saved me hours of research and prevented potential errors.

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Ethan Taylor

•8M

It doesn't actually modify Free Fillable Forms directly, but it analyzes your tax situation and gives you specific instructions for what to do. In my case, it explained exactly how to fill out Form 1116 with my specific numbers and which boxes needed what information. The service is completely secure - they use bank-level encryption and don't store your documents after analysis. I was hesitant too, but they only need your documents to analyze your situation, not to file for you. It's just a smart document analysis tool, not a filing service.

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Carmen Lopez

•8M

I wanted to follow up about my experience with taxr.ai after asking about it earlier. I decided to give it a try with my foreign tax credit situation, and it was genuinely helpful. After uploading my 1099-DIV and draft return, it showed me exactly how to complete Form 1116 for my situation. What impressed me was that it broke down all the intimidating sections into simple instructions. It explained that for my dividend income, I needed to use "Passive Category Income" in Part I, and showed me the exact calculations for Part III. It even flagged that I needed to check box "j" in Part II for dividends. Instead of waiting for the February 8 fix, I was able to complete my return correctly. Definitely worth it for this specific issue!

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AstroAdventurer

•8M

I had the same frustrating problem with Schedule 3 Line 48! After being on hold with the IRS for literally hours over multiple days with no luck, I found Claimyr (https://claimyr.com) and watched their demo at https://youtu.be/_kiP6q8DX5c. Their service got me connected to an actual IRS agent in about 20 minutes instead of the 3+ hour waits I was experiencing before. The agent confirmed this is a known issue with Free Fillable Forms and gave me specific guidance for my situation with foreign tax credits from my investment accounts. They explained that if I didn't want to wait for the February update, I could either complete Form 1116 or print and mail my return with the manual entry. Having an actual conversation with an IRS representative gave me peace of mind about how to proceed correctly.

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AstroAdventurer

•8M

It's not about skipping the line - Claimyr uses technology that continuously calls the IRS for you and navigates the initial automated system. When they finally get through to the point where you'd talk to an agent, they connect you. So you don't have to sit there hitting redial and working through the same prompts over and over. The system works because most people give up after waiting on hold or getting disconnected. Claimyr just automates the persistence part. Think of it as a really patient assistant who keeps trying while you go about your day. When they get through, you get a call to connect with the agent.

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Zoe Papanikolaou

•8M

I need to admit I was wrong about Claimyr. After my skeptical comment, I figured I'd try it since I was desperate to resolve my foreign tax credit issue before the February 8 fix. I was shocked when I actually got connected to an IRS representative in about 25 minutes! The agent walked me through my options for the Schedule 3 Line 48 issue and confirmed it was fine to print my return and manually write in the foreign tax amount since I qualified for the exception from Form 1116. They even explained exactly where to sign and what to include when mailing it. For anyone dealing with this Free Fillable Forms glitch who doesn't want to wait for the update, being able to actually speak with someone at the IRS was incredibly helpful. I'm filing my return tomorrow with confidence now.

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Mei Lin

•8M

I filled it out last week for a similar situation. For small foreign tax amounts from dividends or mutual funds, you only need to complete a few key parts: At the top, check the box for "Passive Category Income" Part I: Enter your foreign income (dividend amount) on line 1a Part II: Put your foreign tax amount ($67) in column j Part III: Complete the limit calculation (your limit will likely be higher than your tax, so you'll get the full credit) Part IV: You can probably skip this for simple situations Then carry the amount from line 38 to Schedule 3, line 48. The trick is that your mutual fund foreign tax is considered "passive category income" which makes things simpler than other types of foreign income.

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