Apply the Section 904 ratio to see the actual credit cap before filing.
International
Foreign tax credit calculator that sizes your limitation and excess.
Calculate the US foreign tax credit limitation, credit allowed, and excess credits available for carryforward under IRC Section 904.
Direct answerThis tool calculates the IRC Section 904 foreign tax credit limitation by comparing foreign taxes paid to the FTC limit based on the ratio of foreign-source to worldwide income.
Section 904 limitationCredit vs deductionBuilt for international tax
1. Enter income and tax data
CalculatorSelect the income category, enter foreign-source and worldwide income, foreign taxes paid, and US tax. Or load the sample scenario.
Enter assumptions or load a sample scenario to see the results.
Live Tool
Foreign Tax Credit Calculator in the browser
The functional tool stays first: enter your foreign income and tax data, review the result, and only then scroll into the guide below.
Privacy-first workflow
This page runs in the browser and does not upload any data.
What this tool is built to solve
A foreign tax credit calculator computes the IRC Section 904 limitation by comparing foreign taxes paid to the FTC limit based on the ratio of foreign-source to worldwide income.
Identify excess credits available for carryforward and plan utilization.
Compare the credit benefit to the deduction alternative with real numbers.
Key signals
The result cards explain where FTC limitation pressure is coming from.
Decision support
Use these cards to move from the calculation into the next international tax planning discussion.
Detailed breakdown
The breakdown keeps the math explainable and export-ready.
Apply the Section 904 ratio of foreign-source income to worldwide income against US tax to size the credit cap.
Calculate the limitation separately for general and passive category income as required by the Code.
Identify excess foreign tax credits available for carryforward to future tax years.
Compare the effective foreign tax rate to the US rate to understand the credit versus limitation position.
Guide Below The Tool
How to use the foreign tax credit calculator well
This section is written for searchers, answer engines, and busy international tax teams: direct definitions, practical steps, and concrete follow-up guidance.
A foreign tax credit calculator computes the IRC Section 904 limitation by comparing foreign taxes paid to the FTC limit based on the ratio of foreign-source to worldwide income.
International tax directors, corporate tax teams, tax advisors, and controllers managing cross-border tax positions.
Foreign-source income, worldwide taxable income, foreign taxes paid, and the US tax liability before credits are the main drivers of the FTC limitation.
Workflow
Four practical steps
Use the tool as a fast decision layer. The goal is to move from raw tax data to a sized FTC position before you finalize the provision or the return.
1
Select the income category.Choose general or passive category to match the FTC basket for this calculation.
2
Enter foreign-source and worldwide income.Provide taxable income from foreign sources and total US taxable income including domestic and foreign.
3
Enter foreign taxes paid and US tax before credits.Add the income taxes paid to foreign governments and the US tax liability before applying the FTC.
4
Review the limitation, credit allowed, and excess position.Check the FTC cap, the credit that can be used this year, and any excess credits for carryforward.
Review Checklist
What reviewers usually validate first
These are the areas teams usually discuss first once the foreign tax credit calculation is visible.
Confirm that income has been sourced correctly under the IRC rules before applying the limitation formula.
Verify that income and taxes are allocated to the correct FTC basket (general vs passive) to avoid cross-crediting issues.
Ensure that foreign taxes meet the creditability requirements under Section 901 and the 2022 final regulations.
Check that expenses have been properly allocated and apportioned to foreign-source income under Section 861.
Track excess credits by year and basket to ensure proper utilization within the carryforward period.
Evaluate whether electing to deduct foreign taxes instead of crediting them produces a better overall result.
Why This Page Exists
Built to close the gap between a formula and a sized FTC position
Most search results either define the foreign tax credit or sell a larger platform. This page solves the immediate job first: use the tool, see the answer, and understand what it means before you move into a deeper international tax workflow.
The functional tool stays on top so users can solve the immediate problem before reading a guide.
The result cards explain what the output means instead of leaving users with a raw number.
Ledger Summit can build richer international tax tooling later, but this page delivers value now.
FAQ
Foreign tax credit calculator questions, answered directly
Written in short form so searchers can get a clear answer without digging through generic product copy.
A foreign tax credit calculator computes the IRC Section 904 limitation by comparing foreign taxes paid to the FTC limit based on the ratio of foreign-source to worldwide income.
International tax directors, corporate tax teams, tax advisors, and controllers managing cross-border tax positions.
Foreign-source income, worldwide taxable income, foreign taxes paid, and the US tax liability before credits are the main drivers of the FTC limitation.
No. The page runs the calculator in your browser and does not require a file upload for the base workflow.
Yes. If you need a richer model, recurring workflow automation, or an internal production version, Ledger Summit can build it around your process.
Next Step
Need this connected to a broader workflow?
Use the free browser tool first. If you need a richer model, reporting automation, or an internal production version, Ledger Summit can build the next layer around your process.
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