Schedule K (Form 1118) – Foreign Tax Carryover Reconciliation Statement

Last reviewed: 2025‑10‑26

Use the Schedule K (Form 1118k) Tax Form Calculator Schedule K (Form 1118k) as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 1118k state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

Schedule K of Form 1118 plays a vital role in preserving the utility of the Foreign Tax Credit (FTC) by tracking carrybacks and carryovers of excess foreign taxes. Since the FTC is subject to limitations by category and tax year, Schedule K ensures taxpayers can apply unused credits appropriately over time while staying compliant with IRC §904(d).

This schedule requires careful attention to:

Foreign Tax Paid: For each separate limitation category (e.g. general, passive, GILTI), report the amount of foreign tax paid in prior years and the portion carried to the current year.
Carryback and Carryover Years: IRS allows a 1-year carryback and 10-year carryforward for unused FTC. Schedule K helps ensure accurate application of these credits before they expire.
Chronological Tracking: You must document how much credit is used each year and what remains. Overclaiming can trigger audits; underclaiming wastes tax benefits.
Category Integrity: Credits must be applied within the same separate limitation category to which they were originally assigned. Schedule K enforces this separation.

Foreign Tax Carryover Reconciliation Schedule
Use a separate Schedule I (Form 1118) for each applicable category of income listed below. Check only one box on each schedule.
Passive Category Income			Section 901(j) Income: Name of Sanctioned Country ▸
General Category Income			Income Re-sourced by Treaty: Name of Country ▸
Foreign Tax Carryover Reconciliation		(i) 10th Preceding Tax Year	(ii) 9th Preceding Tax Year	(iii) 8th Preceding Tax Year	(iv) 7th Preceding Tax Year	(v) 6th Preceding Tax Year	(vi) 5th Preceding Tax Year	(vii) Subtotal (add columns (i) through (vi))
1	Foreign tax carryover from the prior tax year (enter amounts from the appropriate columns of line 8 of the prior year Schedule K (see instructions))
2	Adjustments to line 1 (enter description—see instructions):
a	Carryback adjustment (see instructions)
b	Adjustments for section 905(c) redeterminations (see instructions)
c
d
e
f
g
3	Adjusted foreign tax carryover from prior tax year (combine lines 1 and 2).
4	Foreign tax carryover used in current tax year (enter as a negative number)
5	Foreign tax carryover expired unused in current tax year (enter as a negative number)
6	Foreign tax carryover generated in current tax year
7	Actual or estimated amount of line 6 to be carried back to prior tax year (enter as a negative number)
8	Foreign tax carryover to the following tax year. Combine lines 3 through 7.
Foreign Tax Carryover Reconciliation (continued)		(viii) Subtotal from page 1 (enter the amounts from column (vii) on page 1)	(ix) 4th Preceding Tax Year	(x) 3rd Preceding Tax Year	(xi) 2nd Preceding Tax Year	(xii) 1st Preceding Tax Year	(xiii) Current Tax Year	(xiv) Totals (add columns (viii) through (xiii))
1	Foreign tax carryover from the prior tax year (enter amounts from the appropriate columns of line 8 of the prior year Schedule K (see instructions))
2	Adjustments to line 1 (enter description—see instructions):
a	Carryback adjustment (see instructions)
b	Adjustments for section 905(c) redeterminations (see instructions)
c
d
e
f
g
3	Adjusted foreign tax carryover from prior tax year (combine lines 1 and 2). Include the column (xiv) total on the current year Form 1118, Schedule B, Part II, line 5.
4	Foreign tax carryover used in current tax year (enter as a negative number)
5	Foreign tax carryover expired unused in current tax year (enter as a negative number)
6	Foreign tax carryover generated in current tax year
7	Actual or estimated amount of line 6 to be carried back to prior tax year (enter as a negative number)
8	Foreign tax carryover to the following tax year. Combine lines 3 through 7.

To complete Schedule K effectively:

Group FTC amounts by category (e.g., general income, passive income, foreign branch income).
Track the source year and amount of excess credits.
Determine how much was used in each subsequent year and calculate what remains available.
Ensure the totals reconcile with Part II of Form 1118 to avoid inconsistencies.

Last reviewed: 2025‑10‑26: If you believe this form requires an update, please contact us.

Schedule K is essential for multinational corporations that generate foreign tax credits exceeding the annual limitation. Poorly managed carryovers can lead to lost credits, compliance issues, or penalties. Using Schedule K effectively requires aligning foreign tax records, IRS limits, and category-specific balances over multiple years.

To reduce risk, establish a quarterly review of your FTC position, leverage robust tracking tools or calculators, and maintain detailed source documentation. With correct usage, Schedule K transforms FTC management into a strategic advantage, helping maximise credit utility and reduce global tax burdens.

Frequently Asked Questions

Can I estimate the General Business Credit?

Start with Form 3800 and then reflect the credit here.

How much would a 401(k) contribution change my net?

Model it with the 401(k) Calculator then rerun this page with your pre-tax amount.

Considering an IRS Offer in Compromise?

Read through Form 656-B to understand eligibility and steps.

What does FICA include?

FICA includes Social Security and Medicare payroll taxes withheld from employee wages.

Is there a quick pay-frequency comparison?

Yes—switch frequency on this page; for employer filings see 941 vs 944.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.

Schedule K (Form 1118) – Foreign Tax Carryover Reconciliation Statement