2022 Tax Reporting for Foreign Taxes Paid
Most investors can take a credit or a deduction for their share of foreign taxespaid, as reported in Box 7 of Form 1099-DIV, by their mutual funds with significant non-U.S. holdings. Taking a credit usually is more advantageous, but to qualify you must have held your shares in a fund for at least 16 days of the 31-day period starting 15 days before the ex-dividend date of the fund. For additional information, refer to IRS Publication 514, Foreign Tax Credit for Individuals, and the Instructions for Form 1116, Foreign Tax Credit (Individual, Estate, or Trust).
Tax Reporting for Foreign Taxes Paid Tables
- International/Global Stock and Bond Funds
- Retirement, Spectrum, and Target Funds
Foreign Tax Deduction
If you wish to take a deduction instead of a credit:
For each fund that paid foreign taxes, use Schedule A (Form 1040), Itemized Deductions, to report the amount from Box 7 of your Form 1099-DIV. See the instructions for Form 1040 for additional information.
Foreign Tax Credit
If you wish to take a credit, you may elect to report the total foreign taxes paid in Box 7 of your Form 1099-DIV directly on Schedule 3 (Form 1040) if you meet all of the following conditions:
Your total creditable foreign taxes from all sources are not more than $300 ($600 if married filing jointly),
All such income is passive (all ordinary income from T. Rowe Price funds is passive), and
All such income and any foreign taxes paid are reported on Form 1099-DIV (or other qualified payee statement).
If youdo not meet the conditions above, you generally will be required to complete Form 1116 , Foreign Tax Credit (Individual, Estate, or Trust). Form 1116 computes the amount of the foreign tax credit you may claim on your tax return.
Information to assist you in completing your Form 1116 is provided in the tables below. Please note that you do not need to report the income or taxes paid by a mutual fund on a country-by-country basis on this form. To calculate your foreign source income and foreign source qualified income, multiply the amount in Box 1a of your Form 1099-DIV by the “Foreign source income %” and “Foreign source qualified income %” columns, respectively. If your fund has foreign source qualified dividends, you may be required to make certain adjustments to this amount unless you qualify for an adjustment election. Please refer to the Instructions for Form 1116 for more detailed information.
Please consult your tax advisor forthe impact to your return.
International/Global Stock and Bond Funds
| T.RowePrice International/Global Stock and Bond Funds | ||
| Foreign Source Income Percentage | Foreign Source Qualified Dividend Percentage | |
| International/Global Stock Funds | ||
| Africa & Middle East | 99.18% | 63.68% |
| Asia Opportunities | 58.53% | 28.68% |
| China Evolution Equity | 48.32% | 31.01% |
| Emerging Europe | 100.00% | 97.65% |
| Emerging Markets Discovery Stock | 72.65% | 38.29% |
| Emerging Markets Stock | 70.26% | 44.34% |
| European Stock | 100.00% | 100.00% |
| Global Industrials | 19.72% | 19.72% |
| International Disciplined Equity | 100.00% | 100.00% |
| International Discovery | 100.00% | 100.00% |
| International Equity Index | 100.00% | 100.00% |
| International Stock1 | 79.14% | 69.20% |
| International Value Equity | 100.00% | 89.73% |
| Japan | 100.00% | 100.00% |
| Latin America | 87.66% | 87.66% |
| New Asia | 48.67% | 23.48% |
| Overseas Stock | 92.89% | 85.62% |
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Retirement, Spectrum, and Target Funds
| T.RowePrice Retirement Funds | ||
| Foreign Source Income Percentage | Foreign Source Qualified Dividend Percentage | |
| Retirement 2005 | 8.15% | 7.90% |
| Retirement 2010 | 9.30% | 9.10% |
| Retirement 2015 | 10.11% | 9.98% |
| Retirement 2020 | 11.47% | 11.47% |
| Retirement 2025 | 14.45% | 14.45% |
| Retirement 2030 | 19.98% | 19.98% |
| Retirement 2035 | 27.63% | 27.63% |
| Retirement 2040 | 34.60% | 34.60% |
| Retirement 2045 | 38.61% | 38.61% |
| Retirement 2050 | 40.87% | 40.87% |
| Retirement 2055 | 41.35% | 41.35% |
| Retirement 2060 | 40.13% | 40.13% |
| Retirement 2065 | 43.03% | 43.03% |
| Retirement Balanced | 7.21% | 6.99% |
| Retirement Income 2020 | 11.97% | 11.73% |
| Retirement Blend 2005 | 10.55% | 9.82% |
| Retirement Blend 2010 | 10.88% | 10.35% |
| Retirement Blend 2015 | 12.70% | 11.98% |
| Retirement Blend 2020 | 14.50% | 13.73% |
| Retirement Blend 2025 | 17.24% | 16.59% |
| Retirement Blend2030 | 23.64% | 23.04% |
| Retirement Blend2035 | 30.49% | 30.39% |
| Retirement Blend2040 | 38.41% | 38.41% |
| Retirement Blend2045 | 41.29% | 41.29% |
| Retirement Blend2050 | 43.52% | 43.52% |
| Retirement Blend2055 | 43.53% | 43.53% |
| Retirement Blend2060 | 43.93% | 43.93% |
| Retirement Blend2065 | 38.52% | 38.52% |
| T.RowePriceRetirement I, Spectrum and Target Funds | ||
| Foreign Source Income Percentage | Foreign Source Qualified Dividend Percentage | |
| Retirement I 2005 - I Class | 8.39% | 7.73% |
| Retirement I 2010 - I Class | 9.43% | 8.72% |
| Retirement I 2015 - I Class | 10.64% | 9.92% |
| Retirement I 2020 - I Class | 11.78% | 11.06% |
| Retirement I 2025 - I Class | 14.87% | 14.17% |
| Retirement I 2030 - I Class | 20.25% | 19.82% |
| Retirement I 2035 - I Class | 28.28% | 28.28% |
| Retirement I 2040 - I Class | 34.07% | 34.07% |
| Retirement I 2045 - I Class | 41.79% | 41.79% |
| Retirement I 2050 - I Class | 45.03% | 45.03% |
| Retirement I 2055 - I Class | 44.99% | 44.99% |
| Retirement I 2060 - I Class | 44.89% | 44.89% |
| Retirement I 2065 - I Class | 43.64% | 43.44% |
| Retirement Balanced I - I Class | 7.54% | 6.90% |
| Spectrum Growth | 22.77% | 22.77% |
| Spectrum International | 81.66% | 81.66% |
| Target 2005 | 6.03% | 5.57% |
| Target 2010 | 6.52% | 6.05% |
| Target 2015 | 6.75% | 6.29% |
| Target 2020 | 7.72% | 7.27% |
| Target 2025 | 9.93% | 9.43% |
| Target 2030 | 13.75% | 13.33% |
| Target 2035 | 19.53% | 19.43% |
| Target 2040 | 25.61% | 25.61% |
| Target 2045 | 32.89% | 32.89% |
| Target 2050 | 40.61% | 40.61% |
| Target 2055 | 45.08% | 45.08% |
| Target 2060 | 47.38% | 47.38% |
| Target 2065 | 43.76% | 43.76% |
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1The fund received a refund of foreign taxes paid (with an interest adjustment) and the amount of Foreign Tax Paid in Box 7 may be less than what is included in Box 1a for Ordinary Dividends on your Form 1099-DIV. Ordinary Dividends is the sum of your income dividends, short-term capital gain, foreign tax paid, as well as any interest adjustment.
If a fund is not listed, it did not pass through a foreign tax credit.
Percentages are the same for all fund classes (Investor, Advisor, R, and I classes; Portfolio and Portfolio–II classes). For more information on Advisor, R, Institutional, and Portfolio funds, please visit our website forfinancial intermediaries.
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As an enthusiast with demonstrable expertise in tax reporting, especially in the context of foreign taxes paid by investors, I'd like to shed light on the key concepts presented in the article titled "2022 Tax Reporting for Foreign Taxes Paid." My familiarity with the intricacies of tax regulations, particularly as they pertain to mutual funds with significant non-U.S. holdings, allows me to provide valuable insights into the mentioned topics.
The article discusses the options available to investors for handling foreign taxes paid, as reported in Box 7 of Form 1099-DIV. The primary choices are taking a foreign tax credit or opting for a deduction. Let's delve into the concepts mentioned in the article:
-
Foreign Tax Credit vs. Deduction:
- Investors can choose between a foreign tax credit or a deduction for their share of foreign taxes paid.
- The credit is generally more advantageous, but specific conditions must be met, such as holding shares for at least 16 days of the 31-day period before the ex-dividend date of the fund.
-
IRS Publications and Instructions:
- The article refers to IRS Publication 514, "Foreign Tax Credit for Individuals," and the Instructions for Form 1116, "Foreign Tax Credit (Individual, Estate, or Trust)," for additional information. These resources provide guidance on how to navigate foreign tax credit claims.
-
Tax Reporting for Foreign Taxes Paid Tables:
- Specific tables are provided for International/Global Stock and Bond Funds, as well as Retirement, Spectrum, and Target Funds.
- The tables include information on Foreign Source Income Percentage and Foreign Source Qualified Dividend Percentage for various funds.
-
Form 1116:
- Investors who do not meet certain conditions for reporting foreign taxes directly on Schedule 3 (Form 1040) are generally required to complete Form 1116.
- Form 1116 computes the amount of the foreign tax credit that can be claimed on the tax return.
-
Calculating Foreign Source Income:
- To calculate foreign source income and foreign source qualified income, investors multiply the amount in Box 1a of Form 1099-DIV by the specified "Foreign source income %" and "Foreign source qualified income %" columns.
-
Consulting a Tax Advisor:
- The article emphasizes the importance of consulting a tax advisor for a personalized understanding of the impact on an individual's tax return.
-
Fund-Specific Information:
- Detailed information is provided for specific funds, including International/Global Stock and Bond Funds and Retirement, Spectrum, and Target Funds.
- Percentages for Foreign Source Income and Foreign Source Qualified Dividend vary by fund.
In conclusion, the comprehensive coverage of tax reporting for foreign taxes paid in the article reflects a nuanced understanding of tax regulations and considerations for investors. The inclusion of specific fund details and percentages adds practical insights for individuals navigating the complexities of international investments and tax implications.
