What is a Foreign tax credit carryover?
A foreign tax credit carryover is the unused portion of foreign taxes exceeding the current-year Form 1116 credit limit, kept for other years. Excess is carried back one year, then forward up to ten years, applied oldest first, and matched within the same income category. Tracking carryovers by category keeps every credit from expiring and aligns with planning, such as a Traditional 401k plan that shifts your credit limit.
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