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Department of the Treasury
Internal Revenue Service
Instructions for Schedule C

(Form 1116)

(December 2021)
Foreign Tax Redeterminations

Section references are to the Internal Revenue income tax return for the tax year in which assessed an additional $1 million of taxes
Code unless otherwise noted. the foreign tax redetermination occurs. with respect to the foreign tax year that
This schedule must be submitted ended within U.S. tax year 1. The relation
Future Developments irrespective of whether the foreign tax back year is U.S. tax year 1.
redetermination changed your U.S. tax
Affected tax year. Affected tax year
For the latest information about liability.
developments related to Schedule C means any tax year for which the U.S. tax
(Form 1116) and its instructions, such as Note. If your U.S. tax liability for any year liability is changed as a result of a foreign
legislation enacted after they were changes by reason of the foreign tax tax redetermination. This includes tax
published, go to IRS.gov/Form1116. redetermination, you must file an years in which the U.S. tax liability is
amended return for the tax year with changed as a result of a change in a
respect to which the U.S. tax liability is carryover of a tax attribute, such as a
General Instructions adjusted, in addition to filing Schedule C foreign tax credit carryover or a net
for the year in which the foreign tax operating loss carryover, from a relation
Purpose of Schedule redetermination occurs. See Foreign Tax back year.
Schedule C (Form 1116) is used to Redeterminations in the Instructions for
Functional currency. Functional
identify current year foreign tax Form 1116 for additional information
currency means the dollar, or in the case
redeterminations in each separate regarding foreign tax redeterminations that
of a qualified business unit (QBU), the
category, the years to which they relate, result in a change in U.S. tax liability and
currency of the economic environment in
and other information that satisfies your the related reporting requirements.
which a significant part of such unit’s
obligation to notify the IRS of foreign tax If a foreign tax redetermination doesn’t activities are conducted and which is used
redeterminations that occurred in the change the amount of U.S. tax due for any by such unit in keeping its books and
current year that relate to prior years. tax year, you don’t need to file an records. See section 985(b).
Use Part I to report foreign tax amended return. You satisfy your
redeterminations that resulted in an reporting requirements under Regulations
increase in the amount of foreign taxes section 1.905-4(b)(1)(v) with respect to Specific Instructions
accrued and paid by the taxpayer. the foreign tax redetermination by filing a Important: All information reported on
Schedule C with the return for the tax year Schedule C must be in English. All
Note. If you claim credit for foreign taxes in which the foreign tax redetermination amounts must be stated in U.S. dollars,
on the cash basis method of accounting occurs. unless otherwise specified on the
(you checked the box for “Paid” on Form
1116, Part II), and you pay additional schedule.
foreign income taxes that relate to a prior Definitions
If there are more than three payor entities
tax year, that isn’t a foreign tax Foreign tax redetermination. A foreign for a relation back year, attach a statement
redetermination. You don’t report those tax redetermination means a change in that lists all information requested on
additional foreign taxes paid in Part I of the liability for foreign income taxes Schedule C for those payor entities
Schedule C. You report those as foreign including if: following the format of Schedule C. If there
taxes paid on Form 1116, Part II, filed for • Accrued foreign taxes when paid or are more than 2 relation back years, or
the tax year in which you paid the later adjusted differ from the amounts there are other affected years in addition
additional foreign taxes. claimed as credits (including corrections to the relation back years (Part IV), attach
Use Part II to report foreign tax to accrued amounts to reflect final foreign a statement that lists all information
redeterminations that resulted in a tax liability and additional payments of tax requested on Schedule C for those years
decrease in the amount of foreign taxes that accrue after the close of the tax year following the format of Schedule C.
paid or accrued by the taxpayer. to which the tax relates); Checkboxes at top of page 1. Use a
Use Part III to report foreign tax • Accrued foreign taxes aren’t paid separate Schedule C for each applicable
redeterminations that resulted in a change within 24 months after the close of the tax category of income and check the
in the amount of foreign taxes paid or year to which they relate; or corresponding box. Check only one box
accrued in any relation back year. • Any foreign tax paid is fully or partially for each completed Schedule C.
Use Part IV to report foreign tax refunded. See Categories of Income in the
redeterminations that resulted in a change Relation back year. Relation back year Instructions for Form 1116 for additional
in the U.S. tax liability for any relation back means the U.S. tax year in which the information regarding separate categories.
year or other affected tax year (for foreign taxes being redetermined were For country codes on lines (h) and (i), see
example, by reason of a change in originally taken into account. IRS.gov/CountryCodes for the code to
allowable foreign tax credit carryovers). use.
Example. In U.S. tax year 1, you took
Who Must File into account $2 million of Country X Parts I, II, III, and IV, column 1. In this
Any taxpayer that has a foreign tax foreign income taxes accrued with respect column, enter the ending date of the
redetermination under section 905(c) must to the foreign tax year that ended within relation back year or affected year (Part
complete this schedule and attach it to the U.S. tax year 1. In year 3, Country X IV).

Jan 18, 2022 Cat. No. 37575M

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Parts I and II, columns 2a and 2b. In refunded or deemed refunded and the difference (subtracting column 3 from
columns 2a and 2b, enter the name and ending date of the foreign tax year to column 2) for each affected tax year.
the employer identification number (EIN) which such taxes relate. If the foreign
or reference ID of the payor. If you paid taxes are deemed refunded by reason of Additional Information
the tax directly, enter your name. If the tax the section 905(c)(2) two-year rule For more information, see section 905(c)
was paid by a pass-through entity in which described in the Note in the instructions and Regulations sections 1.905-3,
you have an ownership interest, such as a for column 13, enter in column 4 the date 1.905-4, and 1.905-5.
partnership, enter the information for that that is 24 months after the close of the tax
entity. year to which the foreign taxes relate.
For additional information on EINs and Column 7. Enter the amount of the tax Paperwork Reduction Act
reference IDs, see Reference ID numbers refunded or deemed refunded in the local Notice.
in the Instructions for Form 1118. currency in which the tax is payable. We ask for the information on Schedule C
Parts I and II, column 3. Enter the Column 8. Enter the amount refunded or to carry out the Internal Revenue laws of
code for the country or U.S. possession to deemed refunded denominated in the the United States. You're required to give
which tax is paid using the country codes functional currency of the payor that paid us the information. We need it to ensure
provided at IRS.gov/CountryCodes. or accrued the refunded amount. that you're complying with these laws and
to allow us to figure and collect the right
Parts I and II, column 6. In this Column 13. Check the box if the foreign amount of tax.
column, enter the payor’s income subject tax redetermination is a result of the
to tax in the foreign jurisdiction, as application of the section 905(c)(2) You're not required to provide the
reported on the foreign tax return. two-year rule. information requested on a form that is
subject to the Paperwork Reduction Act
Parts I and II, column 9. Enter the Note. Under section 905(c)(2), if accrued unless the form displays a valid OMB
exchange rate originally used to convert foreign income taxes aren’t paid on or control number. Books or records relating
the local currency (in which the before the date that is 24 months after the to a form or its instructions must be
redetermined foreign tax was paid) to U.S. close of the tax year to which they relate, retained as long as their contents may
dollars. there is a resulting foreign tax become material in the administration of
redetermination that is accounted for as if any Internal Revenue law. Generally, tax
Parts I and II, column 11. Enter the the unpaid portion of the foreign income returns and return information are
U.S. dollar amount of foreign tax of each taxes were refunded on that date. Credit confidential, as required by section 6103.
payor entity that was reported by the may be claimed for those taxes if and
taxpayer on its original or amended return when they are ultimately paid. Foreign The time needed to complete and file
(not taking into account the foreign tax income taxes that first accrue after the Schedule C will vary depending on
redetermination). date 24 months after the close of the tax individual circumstances. The estimated
year to which the taxes relate may not be burden for individual taxpayers filing this
Part I claimed as a credit until paid. form is approved under OMB control
number 1545-0074 and is included in the
Columns 4 and 5. Enter the date the estimates shown in the instructions for
additional foreign taxes were paid and the Part III their individual income tax return. The
ending date of the foreign tax year to Columns 2 and 3. In column 2, enter the estimated burden for all other taxpayers
which such taxes relate. redetermined foreign taxes paid or who file this form is: Recordkeeping, 14
Column 7. Enter the amounts of accrued. In column 3, enter the foreign min.; Learning about the law or the
additional tax accrued in the local taxes paid or accrued per your original or form, 14 min.; Preparing the form, 15
currency in which the tax is payable. previously amended return. min.
Column 8. Enter the amounts of the Columns 4 and 5. Enter the total amount If you have comments concerning the
additional tax denominated in the of foreign tax credit claimed in the accuracy of these time estimates or
functional currency of the payor that separate category on your original or suggestions for making this form simpler,
accrued the additional tax. previously amended return and the total we would be happy to hear from you. You
amount of foreign tax credit claimed after can write to the IRS at the address listed in
Column 13. Check the box if the the foreign tax redetermination. the instructions of the tax return with which
additional foreign tax paid is a liability that this form is filed.
the taxpayer is continuing to contest with
the foreign jurisdiction. Part IV
Columns 2 through 4. Enter the total
Part II redetermined U.S. tax liability, the total
U.S. tax liability reported on your original
Columns 4 and 5. In these columns, or previously amended return, and the
enter the date the foreign taxes were

-2- Instructions for Schedule C (Form 1116) (12-2021)

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