Instructions for Schedule B

Instructions for Schedule B

(Form 1116)

Department of the Treasury

Internal Revenue Service

(Rev. December 2022)

Foreign Tax Carryover Reconciliation Schedule

Who Must File

Section references are to the Internal Revenue Code

unless otherwise noted.

Future Developments

For the latest information about developments related to

Schedule B (Form 1116) and its instructions, such as

legislation enacted after they were published, go to

IRS.gov/Form1116.

What’s New

Line 1 of Schedule B has been revised to instruct filers to

enter the amounts from the appropriate columns of line 8

of the prior year Schedule B.

The “Caution” at the top of the Line 1 Reconciliation

Worksheet at the end of these instructions has been

updated to clarify that the worksheet should now only be

used in cases where you’re amending your 2021 foreign

tax credit within the special 10-year limitation period

described in section 6511(d)(3) (or section 6511(c) if the

period is extended by agreement).

General Instructions

Purpose of Schedule

Schedule B (Form 1116) is used to reconcile your prior

year foreign tax carryover with your current year foreign

tax carryover. Taxpayers are therefore reporting running

balances of their foreign tax carryovers showing all activity

since the filing of their prior year income tax return.

Lines 1 through 3. On these lines, you figure your

adjusted foreign tax carryover from the prior tax year

which is available for credit in the current tax year. The

total amount on line 3, column (xiv), is included on Form

1116, Part III, line 10.

Line 4. If you have a current year excess limitation

(defined later), some or all of the line 3 adjusted foreign

tax carryover amount will be utilized in the current tax

year. This activity is shown on line 4 of Schedule B.

Lines 5 through 8. If you have current year excess

foreign taxes (defined later), none of the line 3 adjusted

foreign tax carryover amount will be utilized in the current

tax year. If you have any remaining carryover from the

10th preceding tax year, this carryover amount will expire

unused. This activity is shown on line 5 of Schedule B.

Furthermore, you will generate a foreign tax carryover in

the current tax year which can be carried back to the prior

tax year and/or carried forward to future tax years (see the

line 10 instructions in the Instructions for Form 1116 for

details). This activity is shown on lines 6 through 8 of

Schedule B.

Dec 29, 2022

With respect to each separate category of income, if

you’re filing Form 1116 that has a foreign tax carryover in

the prior tax year, the current tax year, or both, you must

file Schedule B for that separate category of income.

Definitions

Excess limitation. If your foreign tax credit limitation

(Form 1116, Part III, line 23) exceeds your current year

foreign taxes available for credit (the sum of Form 1116,

Part III, lines 9, 12, and 13), you have an excess limitation.

Excess foreign taxes. If your current year foreign taxes

available for credit (the sum of Form 1116, Part III, lines 9,

12, and 13) exceed your foreign tax credit limitation (Form

1116, Part III, line 23), you have excess foreign taxes.

Specific Instructions

Important: All information reported on Schedule B must

be in English. All amounts must be stated in U.S. dollars.

Checkboxes at top of page 1. Use a separate

Schedule B for each applicable category of income and

check the corresponding box. Check only one box for

each completed Schedule B.

See Categories of Income in the Instructions for Form

1116 for additional information regarding separate

categories. For country codes on lines (h) and (i), see

IRS.gov/CountryCodes for the code to use.

Note. Don’t complete Schedule B for section 951A

category income because the carryover provisions of

section 904(c) don’t apply to foreign taxes assigned to

section 951A category income.

Line 1. Foreign tax carryover from the prior tax year.

Enter on line 1 the amounts from the appropriate columns

of line 8 of the prior year Schedule B. For example, enter

on line 1, column (i) of the current year Schedule B the

amount from line 8, column (ii) of the prior year

Schedule B. Enter on line 1, column (ii) of the current year

Schedule B the amount from line 8, column (iii) of the prior

year Schedule B. Enter on line 1, column (iii) of the current

year Schedule B the amount from line 8, column (iv) of the

prior year Schedule B.

Line 2. Adjustments to line 1. Report on lines 2a, 2b,

2c, 2d, etc., any adjustments resulting from events that

occurred between the filing of your prior year tax return

and the filing of your current year tax return.

Line 2a. Carryback adjustment. Enter on line 2a,

column (xii), the difference between any estimated

carryback amount you may have used on your prior year

carryover schedule (that is, any estimated carryback

Cat. No. 37626c

subtotal on line 4, column (vii); the $250 subtotal on line 4,

column (viii); and the $250 total on line 4, column (xiv).

amount that you entered on line 7, column (xiii), of the

prior year Schedule B) and the actual carryback amount.

Example. For 2022, Sam has excess foreign taxes of

$100 entered on Schedule B, line 6, column (xiii). Sam

enters $20 on line 7 as the estimated amount of line 6 to

be carried back to 2021. He enters $80 on line 8 as the

carryover amount for following years. The actual

carryback amount to 2021 is later determined to be $15.

In 2023, Sam enters $80 on line 1, column (xii), as the

carryover from 2022, corresponding to the amount

entered on line 8, column (xiii), of Schedule B filed for the

2022 tax year. Because the estimated carryback amount

of $20 from 2022 to 2021 (entered on line 7 of Schedule B

filed for 2022) exceeds the actual carryback of $15, Sam

will enter the $5 excess ($20 − $15) on line 2a of his 2023

Schedule B as a positive number. Assuming no other

adjustments are needed, the total carryover amount from

2022 entered on line 3, column (xii), of Sam’s 2023

Schedule B will be $85 ($80 + $5).

Line 2b. Adjustments for section 905(c)

redeterminations. Enter on line 2b any adjustments

needed for section 905(c) redeterminations. See Foreign

Tax Redeterminations in the Instructions for Form 1116

for additional information.

Lines 2c, 2d, 2e, etc. Include on these additional lines

the following types of adjustments needed to reflect:

• Domestic audit adjustments, and

• Any other adjustments needed to properly reflect the

total carryover amount from the prior tax year that is

available for credit in the current tax year.

!

The line 4, column (xiv), total can’t exceed the

amount of the current year excess limitation.

CAUTION

Line 5. Foreign tax carryover expired unused in current tax year. Line 5 is completed only with respect to

the 10th preceding tax year (and the “Subtotal” and

“Totals” columns). For the 10th preceding tax year

(column (i)), combine lines 3 and 4 and enter the result on

line 5, column (i).

Line 6. Foreign tax carryover generated in current

tax year. With respect to a given separate limitation,

line 6 is completed only if you have current year excess

foreign taxes (defined under Definitions, earlier). Enter in

column (xiii) (the current tax year column) the amount of

your unused foreign tax for the current tax year (that is,

the amount by which the sum of Form 1116, Part III, lines

9, 12, and 13, exceeds the amount on Form 1116, Part III,

line 23). Also enter the same amount in the “Totals”

column (column (xiv)).

Line 7. Actual or estimated amount of line 6 to be

carried back to the prior tax year. Enter the amount of

line 6 carried back to the first preceding tax year. If, at the

time you file your current year income tax return, the

actual amount isn’t available, an estimated or tentative

amount may be entered on line 7. If an estimated amount

is entered on line 7 and this amount differs from the actual

carryback amount, the difference will be entered on

line 2a of your subsequent year Schedule B.

Note. Be sure to enter a brief description of each

applicable adjustment item immediately after the lower

case letter in the first column of the schedule.

Note. In order to carry back amounts to the first

preceding tax year, that first preceding tax year must be

an excess limitation year (as defined earlier under

Definitions).

Line 3. Adjusted foreign tax carryover from prior tax

year. Combine lines 1 and 2. The total amount on line 3,

column (xiv), is the adjusted carryover amount from the

prior tax year. It is included on Form 1116, Part III, line 10

(and, if filing an amended return, combined with

carrybacks into the current tax year) to determine the total

amount of foreign taxes that are available for credit in the

current tax year.

Note. When this line 7 carryback amount is subtracted

from line 6, the difference is the amount of the foreign tax

carryover generated in the current tax year which will be

carried forward to your subsequent tax year.

Line 1 Reconciliation Worksheet

Line 4. Foreign tax carryover used in current tax

year. With respect to a given separate limitation, line 4 is

completed only if you have a current year excess

limitation (defined earlier).

Enter in each column the foreign tax carryover utilized

in the current tax year. Starting with column (i), the amount

to be entered on line 4 of a given column will be the

amount on line 3 of that column, but only to the extent that

it doesn’t exceed:

• The amount of the current year excess limitation

(defined earlier), less

• The sum of all amounts entered in all previous columns

of line 4.

If you're amending your 2021 foreign tax credit within the

special 10-year limitation period described in section

6511(d)(3) (or section 6511(c) if the period is extended by

agreement), use the worksheet at the end of the

instructions to figure the amounts to be entered on line 1

of your Schedule B for 2021.

Lines 2 through 5. Use the instructions for lines 4

through 7 of Schedule B earlier to complete lines 2

through 5, respectively, of the Line 1 Reconciliation

Worksheet.

Additional Information

For more information, see section 904(c) and Regulations

section 1.904-2.

Example. For the current tax year, Bob has an excess

limitation of $250. The amount on line 3, column (i), is

$80. The amount on line 3, column (ii), is $60. The amount

on line 3, column (iii), is $130. The amount on line 3 of all

subsequent columns is irrelevant for purposes of this

example. Bob enters $80 on line 4, column (i); $60 on

line 4, column (ii); $110 on line 4, column (iii); the $250

Paperwork Reduction Act Notice.

We ask for the information on Schedule B to carry out the

Internal Revenue laws of the United States. You're

required to give us the information. We need it to ensure

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Instructions for Schedule B (Form 1116) (Rev. 12-2022)

that you're complying with these laws and to allow us to

figure and collect the right amount of tax.

estimated burden for individual taxpayers filing this form is

approved under OMB control number 1545-0074 and is

included in the estimates shown in the instructions for

their individual income tax return. The estimated burden

for all other taxpayers who file this form is

Recordkeeping, 13 min.; Learning about the law or

the form, 21 min.; Preparing the form, 56 min.

You're not required to provide the information

requested on a form that is subject to the Paperwork

Reduction Act unless the form displays a valid OMB

control number. Books or records relating to a form or its

instructions must be retained as long as their contents

may become material in the administration of any Internal

Revenue law. Generally, tax returns and return

information are confidential, as required by section 6103.

If you have comments concerning the accuracy of

these time estimates or suggestions for making this form

simpler, we would be happy to hear from you. You can

write to the IRS at the address listed in the instructions of

the tax return with which this form is filed.

The time needed to complete and file Schedule B will

vary depending on individual circumstances. The

Instructions for Schedule B (Form 1116) (Rev. 12-2022)

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Instructions for Schedule B (Form 1116) (Rev. 12-2022)

Foreign tax carryover used in

your tax year beginning in

2020 (enter as a negative

number).

Foreign tax carryover expired

unused in your tax year

beginning in 2020 (enter as a

negative number).

Foreign tax carryover

generated in your tax year

beginning in 2020.

Amount of line 4 carried back

to your tax year beginning in

2019 (enter as a negative

number).

Combine lines 1 through 5

and enter the results here

and on line 1 of your

Schedule B.

2

3

4

5

6

Note: The line 6 amounts above

are to be entered on the following

corresponding columns of line 1

of your Schedule B for your tax

year beginning in 2021.

For each column, enter the

applicable portion of the

amount from Part III, line 10,

of your Form 1116 for your

tax year beginning in 2020.

1

(i)

(ii)

10th

9th

preceding preceding

tax year

tax year

(i)

(ii)

(iii)

Tax year Tax year Tax year

beginning beginning beginning

in 2010

in 2011

in 2012

(iii)

8th

preceding

tax year

(iv)

Tax year

beginning

in 2013

(iv)

7th

preceding

tax year

(v)

Tax year

beginning

in 2014

(v)

6th

preceding

tax year

(vi)

Tax year

beginning

in 2015

(vi)

(ix)

(x)

(xi)

(xii)

5th

4th

3rd

2nd

1st

preceding preceding preceding preceding preceding

tax year

tax year tax year

tax year

tax year

(xii)

Totals

(vii)

(viii)

(ix)

(x)

(xi)

(add

Tax year Tax year Tax year Tax year Tax year

columns

beginning beginning beginning beginning beginning

(i)

in 2016

in 2017

in 2018

in 2019

in 2020

through

(xi))

Caution: This worksheet is to be completed only for purposes of computing the amounts to be entered on line 1 of your Schedule B (Form

1116) for your tax year beginning in 2021 (that is, if you're amending your 2021 foreign tax credit within the special 10-year limitation

period described in section 6511(d)(3) (or section 6511(c) if the period is extended by agreement)).

Line 1 Reconciliation Worksheet