Updated October 18, 2026. Quick answer: Part II lists the foreign taxes you paid or accrued, one line per country, in both foreign currency and U.S. dollars. Line 8 adds the column (u) totals from lines A to C and carries the result to line 9. The amounts come from foreign tax receipts and from 1099 statements.
What Part II asks for
The Part II heading is “Foreign Taxes Paid or Accrued”. The instructions open with “See General Instructions, earlier, for descriptions of foreign taxes that are eligible for the foreign tax credit and for foreign taxes that aren’t eligible for the foreign tax credit.” They continue “Generally, you must enter in Part II the amount of foreign taxes, in both the foreign currency denomination(s) and as converted into U.S. dollars, that relate to the category of income checked above Part I.” This page is part of the Form 1116 walk-through.
Paid or accrued: the choice at the top
The form says “Credit is claimed for taxes (you must check one)”, with a box for paid and a box for accrued. The instructions say “Generally, you can take a foreign tax credit in the tax year you paid or accrued the foreign taxes, depending on your method of accounting.” For cash-basis filers, “you can choose to take the credit for accrued taxes by checking the “Accrued” box in Part II on a timely filed original return.” “You can’t make this choice on an amended return.” “Once you choose to do this, you must credit foreign taxes in the year they accrue on all future returns.”
Which taxes belong on this form
The instructions say “Taxes are related to the income if the income is included in the foreign tax base on which the tax is imposed.” If one tax spans categories, “If the foreign tax you paid or accrued relates to more than one category of income, apportion the tax among the categories.” The instructions send you to Pub. 514 for an example.
The columns and the country lines
Each country gets its own line, labeled A to C on the form, matching the columns you used for line i on the category boxes and line i page. The form splits the taxes by type: “Taxes withheld at source on:” dividends, rents and royalties, interest, and “Other foreign taxes paid or accrued”. Those appear once in foreign currency and once in U.S. dollars, and column (u) is the total.
For taxes that a 1099 statement reports in dollars, the instructions give a shortcut: “If foreign tax paid on passive income is reported to you in U.S. dollars on a Form 1099-DIV, 1099-INT, or similar statement, you don’t have to convert the amount shown into foreign currency.” “Enter “1099 taxes” in column (l) of Part II, and complete columns (q) through (u) for each foreign country indicated in Part I.” Those statements are explained at 1099-DIV box 7 foreign tax and 1099-INT boxes 4 to 7.
Line 8
The form’s caption is “Add lines A through C, column (u). Enter the total here and on line 9, page 2”. A computed illustration, not an IRS example: if column (u) shows $300 on line A and $150 on line B, line 8 is $450.
Where the number comes from
The amounts come from the foreign tax receipts, withholding statements and 1099 forms you received. The instructions add a note for audits and refunds: “attach a statement to Form 1116 identifying these taxes.” That applies when you take a credit for additional taxes paid after a foreign audit or file an amended return reflecting a foreign tax refund.
Where it goes next
Line 9 says “Enter the amount from line 8. These are your total foreign taxes paid or accrued for the category of income checked above Part I”. Lines 9 to 14, which add carryovers and reductions, are on the lines 9 to 14 page. The finished credit is claimed on Schedule 3 line 1.
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
- Changing from paid to accrued on an amended return. The instructions say “You can’t make this choice on an amended return.”
- Combining taxes from different categories on one form. The instructions say “If the foreign tax you paid or accrued relates to more than one category of income, apportion the tax among the categories.”
- Converting 1099 amounts that are already in dollars. The instructions say “you don’t have to convert the amount shown into foreign currency.”
Related: Form 1116, 1099-DIV box 7 foreign tax, 1099-INT boxes 4 to 7, and Schedule 3 line 1.
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.