How do I claim a Foreign Tax Credit for foreign taxes shown on my 1099-DIV?
Foreign taxes listed in Box 7 of your 1099-DIV qualify for the Foreign Tax Credit. These are taxes that a foreign government withheld on dividends paid by international stocks or mutual funds held in your U.S. brokerage account. You can claim the credit on Form 1116 or, if your total foreign taxes are small enough, skip Form 1116 entirely using the simplified election.
Where to find the numbers on your 1099-DIV:
| Box | What it reports | How it connects to the FTC |
| Box 1a | Total ordinary dividends | Part of your gross income |
| Box 7 | Foreign tax paid | The amount eligible for FTC |
| Box 8 | Foreign country or U.S. possession | The sourcing country for Form 1116 |
Two ways to claim the credit:
1. Simplified election (no Form 1116 required):
- Total creditable foreign taxes for the year are $300 or less ($600 if married filing jointly)
- All foreign tax was reported on a payee statement (1099-DIV, 1099-INT, or Schedule K-1)
- You have no carryover credits from prior years
- Claim directly on Schedule 3 (Form 1040), line 1
2. Form 1116 (required if above the threshold):
- Report foreign taxes in the passive category (most dividend withholding is passive)
- Enter the country from Box 8 and the tax amount from Box 7
- Calculate the FTC limitation based on foreign-source passive income vs. total income
Common situations for expats:
- Multiple funds with different countries: Group by country on separate Form 1116 columns or use the simplified election if under the threshold
- Mutual funds holding international stocks: The fund passes through foreign tax; your share appears in Box 7
- Tax-advantaged accounts: Foreign taxes withheld inside an IRA or 401(k) are not creditable because the income is not currently taxable
If your 1099-DIV foreign taxes push you over the simplified election limit, or you have other foreign income, see our Foreign Tax Credit Guide.
Last updated on April 29, 2026
