Foreign Tax Credit Calculator (2026)
Paid tax to a foreign country on dividends, interest, or earned income? The foreign tax credit lets you offset US tax on the same income — a dollar-for-dollar credit, not a deduction.
How to use this calculator
- Enter foreign-source income.
- Enter foreign tax paid.
- Enter your marginal tax rate.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
The credit is capped at the US tax on your foreign income, so you never pay more than the higher of the two countries' rates — and never less than the US rate. Worked example: $5,000 of foreign dividends taxed at $1,200 abroad, at a 24% US rate — US tax on that income is $1,200, so the full $1,200 credits, eliminating double tax. If foreign tax were $1,500, only $1,200 credits and $300 carries forward 10 years.
Frequently asked questions
Credit or foreign earned income exclusion?
The credit applies to any foreign income including wages, and works even at high income. The foreign earned income exclusion ($132,900 for 2026) removes the first dollars of earned income from US tax entirely but cannot be combined with the credit for the same dollars, and it can raise your effective tax bracket on the rest.
Do I report foreign accounts separately?
Yes — if your foreign financial accounts exceeded $10,000 in aggregate during the year, you must file FinCEN Form 114 (FBAR), and larger assets also trigger Form 8938. The tax credit is separate from these reporting requirements.
What if my foreign tax exceeds the US tax?
The excess carries forward 10 years and back 1 year to offset US tax on foreign income in those years. Because the credit is limited by the US tax on foreign income, a low US year can let you use the carryover later.
Does it apply to foreign real estate?
Yes — foreign rental income and gains can be credited too, but the calculation is more complex: rental income may also carry a foreign rental loss limitation, and gains use a different source rule. For rental properties, run the numbers with a tax pro.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect 2026 rules and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: IRS.gov · 2026 limits per IRS tax inflation adjustments.