2019 Tax Reporting for Foreign Taxes Paid

Most investors can take a credit or a deduction for their share of foreign taxes paid 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 mutual 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.

Tax Reporting for Foreign Taxes Paid Tables
Foreign Tax Deduction

If you wish to take a deduction instead of a credit:

  • For each fund that paid foreign taxes, report the amount from Box 7 of your Form 1099-DIV on Form 1040. You do not have to fill out Form 1116, Foreign Tax Credit (Individual, Estate, or Trust).

Foreign Tax Credit

If you wish to take a credit, you may use the simplified or standard method. You may use the simplified method if:

  • Your share of creditable foreign taxes from all sources is $300 or less (or $600 or less and you file a joint return with your spouse), and
  • All such income is passive. (All ordinary income from T. Rowe Price funds is passive.) 
Simplified Method

If you can use the simplified method, report the total foreign taxes paid shown in Box 7 of your Form 1099-DIV plus any other eligible foreign taxes on Form 1040.

Standard Method

If you cannot use the simplified method, you will be required to complete Form 1116 and attach it to your return. Form 1116 computes a limitation on the amount of the foreign tax credit you may deduct based on the total income received from foreign sources ("foreign source income") and total foreign taxes paid. Please note that you no longer have to report the income or taxes paid on a country-by-country basis on your federal income tax return.

Your total foreign taxes paid for Form 1116 is provided in Box 7 of your Form 1099-DIV and, together with the total of your taxes paid from other funds or sources, should be included on Form 1116, Part II, Line 8.

Your foreign source income for Form 1116, Part I, Line 1a should be calculated using one of two methods:

Method 1

Multiply the amount in Box 1a of your Form 1099-DIV by the "Foreign Source Income Percentage" in the tables that follow. You should use this method if:

  • Your income (excluding net capital gain and qualified dividend income) is taxed at or below the 24% income tax bracket, and

  • Your foreign qualified dividend income and foreign long-term capital gain from all sources is less than $20,000. Your foreign qualified dividend income for your T. Rowe Price fund can be calculated by multiplying the amount in Box 1a of your Form 1099-DIV by the "Foreign Source Qualified Dividend Percentage" in the tables that follow. Please note that no portion of your T. Rowe Price fund's distribution is foreign long-term capital gains.

You also should use this method if you determine that you cannot treat any portion of the foreign qualified dividend amount in Box 1b of your Form 1099-DIV as qualified dividends. (This would apply, for example, if you did not meet the holding period requirement to tax your fund dividends at the lower rates.)

Method 2

If you do not qualify to use Method 1, the IRS requires you to adjust the amount of foreign source income used to calculate your foreign tax credit because of foreign qualified dividends.

To calculate an adjusted foreign source income percentage, the “Foreign Source Income Percentage” is reduced by the “Foreign Source Income Qualified Dividend Percentage” multiplied by an adjustment factor. The adjustment factor is the difference between the highest marginal income tax rate and your lower qualified dividend tax rate, divided by the highest marginal income tax rate.

Once you have determined your adjusted foreign source income percentage, compute your foreign source income by multiplying the amount in Box 1a of your Form 1099-DIV by this adjusted percentage. This amount, together with the total of your adjusted foreign source income from other funds or sources, should be included on Form 1116, Part I, Line 1a.

Please consult your tax advisor for details.

International/Global Stock and Bond Funds

Ex-Dividend and Reinvestment Date: December 17, 2019

T. Rowe Price International/Global Stock and Bond Funds
  Foreign Source Income Percentage Foreign Source Qualified Dividend Percentage
International/Global Stock Funds
Africa & Middle East 100.00% 27.27%
Asia Opportunities 100.00% 81.11%
Emerging Europe 96.15% 100.00%
Emerging Markets Stock 100.00% 66.85%
Emerging Markets Discovery Stock1 100.00% 72.40%
European Stock 100.00% 100.00%
Global Growth Stock 89.38% 95.36%
Global Industrials 69.45% 100.00%
International Disciplined Equity2 68.77% 68.28%
International Discovery 78.57% 87.84%
International Equity Index 94.46% 84.06%
International Stock 99.59% 58.54%
International Value Equity 99.67% 95.41%
Japan 70.70% 78.70%
Latin America 91.01% 21.54%
New Asia 100.00% 75.42%
Overseas Stock 96.95% 92.57%
International/Global Bond Funds
Dynamic Global Bond 100.00% 0.00%
Emerging Markets Bond 100.00% 0.00%
Emerging Markets Local Currency Bond 100.00% 0.00%
Global Multi-Sector Bond 58.51% 0.00%
International Bond 100.00% 0.00%
International Bond (USD Hedged) 65.21% 0.00%
Retirement, Spectrum, and Target Funds

Ex-Dividend and Reinvestment Date: December 20, 2019

T. Rowe Price Retirement and Spectrum Funds
  Foreign Source Income Percentage Foreign Source Qualified Dividend Percentage
Retirement 2005 28.55% 7.67%
Retirement 2010 28.24% 8.69%
Retirement 2015 30.02% 10.63%
Retirement 2020 30.71% 12.92%
Retirement 2025 35.59% 17.52%
Retirement 2030 39.34% 22.02%
Retirement 2035 42.11% 26.01%
Retirement 2040 44.28% 30.11%
Retirement 2045 48.19% 34.95%
Retirement 2050 49.22% 35.77%
Retirement 2055 47.65% 34.69%
Retirement 2060 47.77% 35.18%
Retirement Balanced 25.94% 9.58%
Retirment Income 20203 21.91% 3.00%
Retirement I 2005 - I Class 29.37% 8.53%
Retirement I 2010 - I Class 31.42% 10.32%
Retirement I 2015 - I Class 32.83% 12.38%
Retirement I 2020 - I Class 35.22% 15.51%
Retirement I 2025 - I Class 38.11% 19.66%
Retirement I 2030 - I Class 38.93% 22.45%
Retirement I 2035 - I Class 42.18% 26.74%
Retirement I 2040 - I Class 43.68% 30.07%
Retirement I 2045 - I Class 45.25% 33.14%
Retirement I 2050 - I Class 45.33% 33.10%
Retirement I 2055 - I Class 45.52% 33.48%
Retirement I 2060 - I Class 46.81% 34.70%
Retirement Balanced I - I Class 27.11% 10.21%
Spectrum Growth 36.74% 29.47%
Spectrum Income 29.59% 0.00%
Spectrum International 99.84% 83.17%
Target  2005 30.34% 7.84%
Target  2010 30.95% 8.46%
Target  2015 30.91% 9.18%
Target  2020 33.08% 12.13%
Target  2025 34.63% 15.32%
Target  2030 37.77% 18.16%
Target  2035 41.34% 21.34%
Target  2040 43.37% 23.75%
Target  2045 43.41% 26.27%
Target  2050 44.17% 29.33%
Target  2055 46.72% 32.97%
Target  2060 46.63% 34.30%

1Formerly Emerging Markets Value Stock

2Formerly International Concentrated Equity

3The Ex-Dividend and Reinvestment Date is December 17, 2019

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). For more information on Advisor, R, Institutional, and Portfolio funds, please visit our website for financial intermediaries at www.troweprice.com/financial-intermediary/us/en/investments/tax-center.html.

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