2025›Notice 2023-80, 2023-52 I.R.B. 1583, available at›General Instructions
Foreign Taxes Eligible for a Credit
2025 Inst 1116 (PDF) · 2026-10-03 edition · updated 2026-10-04 · United States
You can take a credit for income, war profits, and excess profits taxes paid or accrued during your tax year to any foreign country or U.S. territory, or any political subdivision (for example, city, state, or province) of the country or territory. This includes taxes paid or accrued in lieu of a foreign or territory income, war profits, or excess profits tax that is otherwise generally imposed. For purposes of the credit, U.S. territories include Puerto Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa. See Pub. 514 for more information on what foreign taxes qualify for the credit.
U.S. citizens living in certain treaty countries may be able to take an additional foreign tax credit for foreign tax imposed on certain items of income from the United States. See Tax Treaties in Pub. 514 for details. If this applies to you, use the worksheet near the end of Pub. 514 to help you figure this additional credit.
If you make the election under section 962 to be taxed at corporate rates on the amount you must include in gross income under sections 951(a) and 951A(a) from your controlled foreign corporations (CFCs), you can claim the credit based on your share of foreign taxes paid or accrued by the CFC. If you make this election, you must claim the credit by filing Form 1118. If you receive a distribution of earnings that you previously included in gross income under sections 951(a) and 951A(a), and you paid or accrued
2 Instructions for Form 1116 (2025)
foreign taxes (such as withholding taxes) that were imposed on such distribution, you can claim the credit for such taxes regardless of whether you make the election under section 962, but you must file Form 1116 to do so. See Part II, later, for more information. You must also still file Form 1116 to claim the credit for other foreign taxes you paid or accrued. For more information on how to complete your Form 1116 and Form 1118 when making this election, see sections 960 and 962 and Pub. 514.
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