Updated October 18, 2026. Quick answer: Line 1a is the foreign gross income for the category you checked, from the country named on line i. Line 1b is a box you check only in one narrow case about employee pay sourced on an alternative basis. The income comes from your own records and statements, and line 1a feeds the rest of Part I.
What line 1a asks for
The form’s caption is “Gross income from sources within country shown above and of the type checked above (see instructions)”. The instructions explain it this way: “Include income in the category checked above Part I that is taxable by the United States and is from sources within the country entered on line i, even if isn’t taxable by that foreign country.” They also say “Identify the type of income on the dotted line next to line 1a.” This page is part of the Form 1116 walk-through, and the category and country are on the category boxes and line i page.
What stays off line 1a
The instructions say “Don’t include any earned income excluded on Form 2555, Foreign Earned Income.” How that exclusion works is covered at Form 2555.
The IRS’s example: two forms for two kinds of income
The instructions give this example: “If you received dividends (passive category income) and wages (general category income) from foreign sources, you must complete two Forms 1116.” On the first form, the instructions say to “check box c (passive category income), enter the dividends on line 1a, and enter “Dividends” on the dotted line.”
Line 1b: the alternative-basis box
The instructions say “You must check the box on line 1b if all of the following apply.” There are three conditions: “The income on line 1a is compensation for services you performed as an employee.” Next, “Your total employee compensation from both U.S. and foreign sources was $250,000 or more.” And “You used an alternative basis (discussed in Pub. 514) to determine the source of the compensation entered on line 1a.”
When the box applies, there is paperwork: “attach to Form 1116 a statement that contains the following information.” The instructions end the section with “You must keep documentation showing why the alternative basis more properly determines the source of the compensation.”
Where the number comes from
The amounts come from your own records of foreign income: the statements you received for dividends or interest, wage statements, and similar documents. Foreign tax reported on a 1099 is covered at 1099-DIV box 7 foreign tax. The instructions note that compensation sourcing follows set rules: “Compensation (other than fringe benefits) is sourced on a time basis.” If your income came from more than one country, each country gets its own column, as explained on the category boxes and line i page.
Where it goes next
Line 1a is the starting point for the deductions on lines 2 to 5. Line 7 later says “Subtract line 6 from line 1a.” That arithmetic is on the lines 6 and 7 page.
Edition and line numbers
This page reads the 2025 Form 1116, Foreign Tax Credit (Individual, Estate, or Trust), and its 2025 instructions, the current files irs.gov served on 2026-10-18. They are the files for the tax year 2025 return, filed in 2026. The form’s own header says “Attach to Form 1040, 1040-SR, 1040-NR, 1041, or 990-T.” Check the tax year printed on the form you are filling in and use the line numbers on that year’s form, because a different year’s form can number or word its lines differently.
Common mistakes
- Entering earned income you excluded. The instructions say “Don’t include any earned income excluded on Form 2555, Foreign Earned Income.”
- Leaving the type of income unlabeled. The instructions say “Identify the type of income on the dotted line next to line 1a.”
- Checking line 1b when only some of its conditions apply. The instructions say “You must check the box on line 1b if all of the following apply.”
Related: Form 1116, Form 2555, 1099-DIV box 7 foreign tax, and the foreign earned income exclusion and investment income.
Sources
- Instructions for Form 1116, Foreign Tax Credit (Individual, Estate, or Trust) (2025): https://www.irs.gov/pub/irs-pdf/i1116.pdf
- Form 1116, Foreign Tax Credit (Individual, Estate, or Trust) (2025): https://www.irs.gov/pub/irs-pdf/f1116.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.