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AH XSL/XML Fileid: … 1118SCHK/201812/A/XML/Cycle05/source (Init. & Date) _______
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Department of the Treasury
Internal Revenue Service
Instructions for Schedule K
(Form 1118)
(Rev. December 2018)
Section references are to the Internal Revenue Carryforward of Excess Foreign Taxes in prior year Schedule K. Enter on line 1,
Code unless otherwise noted. the instructions for Form 1118 for details). column (iii) of the current year Schedule K
This activity is shown on lines 6 through 8 the amount from line 8, column (iv) of the
Future Developments of the Schedule K (Form 1118). prior year Schedule K.
Line 2. Adjustments to line 1. Report
For the latest information about Who Must File on lines 2a, 2b, 2c, 2d, etc. any
developments related to Schedule K
(Form 1118) and instructions, such as With respect to each separate category of adjustments resulting from events that
legislation enacted after they were income, any corporation filing Form 1118 occurred between the filing of the prior
published, go to IRS.gov/Form1118. that has a foreign tax carryover in the prior year tax return and the filing of the current
tax year, the current tax year, or both must year tax return.
file Schedule K (Form 1118) for that
What’s New separate category of income. Line 2a. Carryback adjustment.
Enter on line 2a, column (xii) the
The separate category checkboxes have difference between any estimated
been deleted at the top of page 1 of Definitions carryback amount you may have used on
Schedule K. Taxpayers are now required Excess limitation. If the corporation's your prior year carryover schedule (i.e.,
to enter a separate category code on new foreign tax credit limitation (Schedule B, any estimated carryback amount that you
line a. If applicable, taxpayers should also Part II, line 11) exceeds its current year entered on line 7, column (xiii) of the prior
enter a country code on line b or line c. foreign taxes available for credit (the sum year Schedule K (Form 1118)) and the
See Codes at top of page 1, later, for of Schedule B, Part II, lines 1 through 4), actual carryback amount.
additional information. the corporation has excess limitation. Example. In the 2018 tax year,
Excess foreign taxes. If the Corporation A has excess foreign taxes of
General Instructions corporation's current year foreign taxes $100 (i.e., the sum of lines 1 through 4 of
available for credit (the sum of Form 1118, Schedule B, Part II exceeds
Purpose of Schedule Schedule B, Part II, lines 1 through 4) Form 1118, Schedule B, Part II, line 11 by
Schedule K (Form 1118) is used to exceed its foreign tax credit limitation $100) entered on Schedule K (Form
reconcile the corporation's prior year (Schedule B, Part II, line 11), the 1118), line 6. Corporation A enters $20 on
foreign tax carryover with its current year corporation has excess foreign taxes. line 7 as the estimated amount of line 6 to
foreign tax carryover. Corporations are be carried back to the 2017 tax year.
thus reporting running balances of their Corporation A enters $80 on line 8 as the
foreign tax carryovers showing all activity Specific Instructions carryover amount for following years. The
since the filing of the prior year income tax Important: All information reported on actual carryback amount to the 2017 tax
return. Schedule K (Form 1118) must be in year is later determined to be $15. In the
English. All amounts must be stated in 2019 tax year, Corporation A enters $80
Lines 1 through 3. On these lines, the U.S. dollars. on line 1, column (xii) as the carryover
corporation computes its adjusted foreign from the 2018 tax year, corresponding to
tax carryover from the prior tax year which Codes at top of page 1. On line a, enter the amount entered on line 8, column (xiii)
is available for credit in the current tax the same separate category code as that of the Schedule K filed for the 2018 tax
year. The line 3 total is included on Form shown on the Form 1118 to which this year. Because the estimated carryback
1118, Schedule B, Part II, line 5. Schedule K is attached. amount of $20 from the 2018 tax year to
the 2017 tax year (entered on line 7 of the
Line 4. If the corporation has a current Note. Do not complete Schedule K for Schedule K filed for the 2018 tax year)
year excess limitation (defined below), section 951A category income because exceeds the actual carryback of $15, on
some or all of the line 3 adjusted foreign the carryover provisions of section 904(c) the Schedule K for the 2019 tax year,
tax carryover amount will be utilized in the do not apply to foreign taxes assigned to Corporation A enters the $5 excess ($20 -
current tax year. This activity is shown on section 951A category income. $15) on line 2a as a positive number.
line 4 of the Schedule K (Form 1118).
If applicable, on line b or line c, enter Assuming no other adjustments are
Lines 5 through 8. If the corporation has the same country code as that shown on needed, the total carryover amount from
current year excess foreign taxes (defined the Form 1118 to which this Schedule K is 2018 entered on line 3, column (xii) of the
below), none of the line 3 adjusted foreign attached. 2019 Schedule K will be $85 ($80 + $5).
tax carryover amount will be utilized in the
current tax year. If the corporation has any Line 1. Foreign tax carryover from the Line 2b. Adjustments for section
remaining carryover from the 10th prior tax year. Enter on line 1 the 905(c) redeterminations. Enter on
preceding tax year, this carryover amount amounts from the appropriate columns of line 2b any adjustments needed for
will expire unused. This activity is shown line 8 of the prior year Schedule K (Form section 905(c) redeterminations. See
on line 5 of the Schedule K (Form 1118). 1118). For example, enter on line 1, Foreign Tax Credit Redeterminations in
Furthermore, the corporation will generate column (i) of the current year Schedule K the instructions for Form 1118 for
a foreign tax carryover in the current tax the amount from line 8, column (ii) of the additional information.
year which can be carried back to the prior prior year Schedule K. Enter on line 1,
tax year and/or carried forward to future column (ii) of the current year Schedule K
tax years (see Carryback and the amount from line 8, column (iii) of the
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