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Level 7
March 25, 2026
Solved

Form 1116 qualified vs unqualified dividends

  • March 25, 2026
  • 1 reply
  • 5 views

Where do I enter the qualified dividend for the adjustment to the calculation

Best answer by IntuitAmyC2
  1. The program handles the math percentages for the adjustment from the 1099-DIV. You just need to verify the 1099-DIV entries are linked on the 1116. The qualified foreign income must be entered.
  2. Review the Foreign Tax Credit Comp Wks and look for the Qualified Dividends and Capital Gains Tax Worksheet section. There is a checkbox after line 1f. 
  • If checked: ProSeries is applying the math above.
  • If unchecked: ProSeries has determined you meet the "Adjustment Exception" (usually because your total foreign qualified dividends + capital gains are less than $20,000 and you are under certain income thresholds)

 

Reference: Form 1116 Instructions  To adjust your foreign source qualified dividends or capital gain distributions, multiply your foreign source qualified dividends or capital gain distributions in each separate category by 0.4054 if the foreign source qualified dividends or capital gain distributions are taxed at a rate of 15%, and by 0.5405 if they are taxed at a 20% rate. Include the results on line 1a of the applicable Form 1116.

You adjust your foreign source qualified dividends or capital gain distributions taxed at the 0% rate by not including them on line 1a.

1 reply

IntuitAmyC2
Level 4
March 27, 2026
  1. The program handles the math percentages for the adjustment from the 1099-DIV. You just need to verify the 1099-DIV entries are linked on the 1116. The qualified foreign income must be entered.
  2. Review the Foreign Tax Credit Comp Wks and look for the Qualified Dividends and Capital Gains Tax Worksheet section. There is a checkbox after line 1f. 
  • If checked: ProSeries is applying the math above.
  • If unchecked: ProSeries has determined you meet the "Adjustment Exception" (usually because your total foreign qualified dividends + capital gains are less than $20,000 and you are under certain income thresholds)

 

Reference: Form 1116 Instructions  To adjust your foreign source qualified dividends or capital gain distributions, multiply your foreign source qualified dividends or capital gain distributions in each separate category by 0.4054 if the foreign source qualified dividends or capital gain distributions are taxed at a rate of 15%, and by 0.5405 if they are taxed at a 20% rate. Include the results on line 1a of the applicable Form 1116.

You adjust your foreign source qualified dividends or capital gain distributions taxed at the 0% rate by not including them on line 1a.