Form 1116 line 1a, foreign gross income by country.

What the instructions say about lines 1a and 1b

What line 1a measures

Part I of Form 1116 reports your foreign income and the deductions that reduce it. Line 1a is the first dollar amount: the gross income for the country named on line i and the category checked above Part I. The test the instructions use has three pieces. The income must be in the category you checked, it must be taxable by the United States, and it must come from sources within the country you entered. It does not matter whether the foreign country itself taxes the income.

The form has columns A, B, and C for countries, so one Form 1116 can cover up to three countries within a single category, with a total column that adds them. A separate Form 1116 is needed for each category of income.

Why dividends and wages need two forms

The IRS gives a plain example. If you received dividends, which are passive category income, and wages, which are general category income, from foreign sources, you complete two Forms 1116. On one, you check box c for passive category income, enter the dividends on line 1a, and write “Dividends” on the dotted line. On the other, you check box d for general category income and enter the wages not excluded on Form 2555 on line 1a, writing “Wages.” You then complete Parts I, II, and III of each form and complete Part IV on the form with the larger amount on line 24.

What to leave out

Earned income that you excluded on Form 2555 stays off line 1a. That also means the deductions tied to that income stay off lines 2 through 5, because the instructions say not to include deductions and losses related to exempt or excluded income there. Line 1a is gross income; the deductions that definitely relate to it go on line 2, and a ratable share of other deductions goes on lines 3a through 5.

Capital gains and qualified dividends

Foreign source capital gains and qualified dividends can be taxed at preferential rates, so the instructions require adjustments before they are placed on line 1a. The IRS provides Worksheet A and Worksheet B for that. For example, if the separate category capital gain is positive and the adjustment does not apply, the positive amount is included on line 1a of the matching Form 1116. Read the Foreign Qualified Dividends and Capital Gains (Losses) section of the instructions before you enter such amounts, because a mismatch with line 18 can force you to complete the Worksheet for Line 18.

Line 1b in one paragraph

Line 1b is a checkbox, not an amount. It applies only when all three conditions hold: the line 1a income is employee compensation, your total employee compensation from U.S. and foreign sources was $250,000 or more, and you used an alternative basis described in Pub. 514 to source it. In that case you also attach a statement with your name and Social Security number, the specific compensation or fringe benefit, the alternative basis used, and a computation, and you must keep documentation showing why that basis more properly determines the source.

More line pages in this set

Related lines: Form 1116 Line 18, Form 1116 Lines 15 and 16, Form 1116 Line 12.

Sources

• Instructions for Form 1116 (2025): the line-by-line instructions on this page. Read November 2, 2026.
• Form 1116 (2025), Foreign Tax Credit (Individual, Estate, or Trust): the printed line wording and arithmetic on the form. Read November 2, 2026.

Instructions for Form 1116, 2025 edition. The line labels were read from the Form 1116 (2025) PDF the IRS had posted on the date read. Line numbers can shift between years, so check them against the form for your tax year. Examples marked made-up use invented figures; the others reproduce the IRS's own examples.