International Tax Calculator
Calculate Foreign Tax Credit (FTC) limitations and GILTI inclusions for US taxpayers with foreign-source income.
About this calculator
This calculator runs two largely independent international tax calculations. The Foreign Tax Credit limitation formula in IRC § 904(a) limits how much of your foreign taxes you can credit against US tax to the share of your US tax liability attributable to foreign-source income -- (foreign taxable income / worldwide taxable income) x US tax before credits. Foreign-Source Income dominates both FTC Limitation and Foreign Tax Credit Allowed because it's the numerator driving that ratio directly, while US-Source Income only moves the ratio's denominator and the underlying US tax bill.
US-Source Income, on the other hand, dominates US Tax Before Credits outright, since that figure is computed purely from worldwide taxable income (US-Source plus Foreign-Source income, minus the standard deduction) with no reference to CFC Tested Income, Qualified Business Asset Investment, or Taxpayer Type at all -- those three inputs exist solely for the separate GILTI calculation and structurally cannot move US Tax Before Credits or the FTC figures. GILTI Inclusion is Tested Income minus a 10% deemed return on QBAI, taxed differently by Taxpayer Type: individuals include 100% of the inclusion as ordinary income with no deduction, while C corporations get a 50% Section 250 deduction plus an 80% deemed-paid credit for foreign taxes tied to the tested income. This model uses a single-year snapshot and doesn't cover Subpart F income, the Section 962 election, or tax treaty adjustments.
Tax Disclaimer
This calculator provides estimates based on general tax rules and may not reflect your specific situation. Tax laws vary by jurisdiction and change frequently. Consult a qualified tax professional or CPA for advice tailored to your circumstances.
Inputs
Results
Foreign Tax Credit Allowed
$15,619.00
≈ 8 gaming PCs
Total US Tax Liability
$29,285.00
≈ 15 gaming PCs
Figures current as of 2026. Sources: IRC § 904(a): the credit allowed under § 901 may not exceed the taxpayer's US tax liability multiplied by the ratio of foreign-source taxable income to total taxable income., One Big Beautiful Bill Act, Pub. L. No. 119-21, § 70323(a)(2), 139 Stat. 72 (July 4, 2025), striking former IRC § 951A(b)'s GILTI and "net deemed tangible income return" (10% of QBAI) definitions, effective for tax years beginning after Dec. 31, 2025.
How to Use This Calculator
- Enter US-Source Income and Foreign-Source Income before foreign taxes.
- Set Foreign Taxes Paid — creditable taxes reduce your U.S. tax on foreign income.
- Enter CFC Tested Income and QBAI if you have controlled foreign corporation income (GILTI).
- Select Taxpayer Type: Individual or C Corporation (affects GILTI treatment).
- Review Foreign Tax Credit Allowed and Total US Tax Liability.
- Foreign tax credit limitations are complex — consult an international tax attorney for multi-country operations.
How the result changes with Foreign-Source Income ($)
| Foreign-Source Income ($) | Foreign Tax Credit Allowed | Total US Tax Liability |
|---|---|---|
| $40,000.00 | $7,228.00 | $27,106.00 |
| $60,000.00 | $11,181.00 | $27,953.00 |
| $120,000.00 | $20,000.00 | $37,704.00 |
| $200,000.00 | $20,000.00 | $65,634.00 |
What each input means
- US-Source Income ($)
- Income from US sources (wages, investments, business income).
- Foreign-Source Income ($)
- Income earned from foreign sources before foreign taxes.
- Foreign Taxes Paid ($)
- Total creditable foreign income taxes paid or accrued.
- CFC Tested Income ($)
- Controlled foreign corporation tested income for GILTI (leave 0 if not applicable).
- Qualified Business Asset Investment ($)
- Aggregate adjusted bases of depreciable tangible property used in CFC's trade or business (for GILTI QBAI exemption).
- Taxpayer Type
- C-Corps get Section 250 deduction (50% GILTI exclusion). Individuals include 100% of GILTI.
What each result means
- Foreign Tax Credit Allowed
- FTC you can claim, limited to the lesser of foreign taxes paid or the FTC limitation.
- Total US Tax Liability
- Net US tax after FTC and including any GILTI tax.
- Effective Tax Rate
- Total US tax as a percentage of worldwide income.
- FTC Limitation
- Maximum FTC = (foreign source income / worldwide income) x US tax.
- FTC Carryover
- Excess foreign taxes that can be carried back 1 year or forward 10 years.
- GILTI Inclusion
- Tested income minus 10% deemed tangible income return on QBAI.
- Net GILTI Tax
- US tax on GILTI inclusion after Section 250 deduction and deemed-paid FTC.
- US Tax Before Credits
- Federal income tax before applying the Foreign Tax Credit.
How this is calculated
Worked example, using the default values
- Identify Input Parameters4 parametersUS-Source Income ($) = 150000, Foreign-Source Income ($) = 80000, Foreign Taxes Paid ($) = 20000, CFC Tested Income ($) = 0 = 6 input(s) provided
- Calculate Foreign Tax Credit AllowedForeign Tax Credit Allowed = min(foreignTaxesPaid, ftcLimit)15619 = $15,619
- Calculate Total US Tax LiabilityTotal US Tax Liability = usTaxBeforeCredits - ftcAllowed + netGiltiTax29285 = $29,285
- Calculate Effective Tax Rate12.73 = 12.73%
- Calculate FTC LimitationFTC Limitation = taxableIncome > 015619 = $15,619
Figures and sources
- Foreign Tax Credit limitation formula (2026) — IRC § 904(a): the credit allowed under § 901 may not exceed the taxpayer's US tax liability multiplied by the ratio of foreign-source taxable income to total taxable income.
- GILTI/QBAI computation repealed for tax years beginning after 2025 (2025) — One Big Beautiful Bill Act, Pub. L. No. 119-21, § 70323(a)(2), 139 Stat. 72 (July 4, 2025), striking former IRC § 951A(b)'s GILTI and "net deemed tangible income return" (10% of QBAI) definitions, effective for tax years beginning after Dec. 31, 2025.
Engine last updated . Checked against 2 independently-derived tests — how we verify calculators. Built by Paul Gunder, a software engineer, not a licensed financial, medical, or legal professional.
Frequently Asked Questions
Why does Foreign-Source Income affect my FTC more than US-Source Income does?
The FTC Limitation formula is (Foreign-Source Income / Worldwide Income) x US Tax Before Credits -- Foreign-Source Income sits directly in the numerator of that ratio, so raising it pushes the limitation up close to 1:1. US-Source Income affects the same ratio only through the denominator (and indirectly through the tax bill itself), which is a gentler, more diluted effect on the final limitation.
Do CFC Tested Income and QBAI affect my Foreign Tax Credit?
No. The FTC Limitation and Foreign Tax Credit Allowed are both computed strictly from US-Source Income, Foreign-Source Income, and Foreign Taxes Paid -- CFC Tested Income and Qualified Business Asset Investment only feed into the separate GILTI Inclusion calculation and have zero effect on the FTC figures, regardless of their value.
How does Taxpayer Type change my GILTI tax?
Individuals include 100% of GILTI Inclusion as ordinary income with no offsetting deduction and get no deemed-paid foreign tax credit on it. C Corporations instead get a 50% Section 250 deduction (cutting the taxable amount in half) plus an 80% deemed-paid credit for foreign taxes attributable to the tested income -- a meaningfully lighter GILTI tax burden for corporate taxpayers under this model.
What's excluded from this international tax estimate?
This calculator covers the Foreign Tax Credit limitation and GILTI inclusion for a single tax year, but doesn't model Subpart F income (a separate category of CFC income taxed currently regardless of GILTI), the Section 962 election that lets individuals be taxed at corporate GILTI rates, tax treaty relief, or the branch basket and other separate FTC limitation categories the real Form 1116 requires.
Does the GILTI Inclusion calculation here still match current law?
Only for tax years beginning before 2026. This calculator's GILTI Inclusion is Tested Income minus a 10% deemed return on QBAI, which was how former IRC § 951A(b) defined GILTI. The One Big Beautiful Bill Act (Pub. L. 119-21, § 70323, enacted July 4, 2025) struck that definition and the QBAI subtraction entirely, replacing it with a simpler "net CFC tested income" computation for tax years beginning after December 31, 2025 -- so a current-year filer's actual GILTI (now sometimes called NCTI) no longer gets the QBAI offset this calculator applies. The Foreign Tax Credit side of this calculator, based on IRC § 904(a), is unaffected by that change.
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