AGI is $223K of which $101K is from Canadian retirement income. Taxable income is $185K and, after Sch A allocations, Canadian taxable income is $85K. This amount has carried over from the wks to line 17 F1116.  However, nothing is carrying over from F1040 to F1116 lines 18 on.

The foreign tax in USD is showing on lines 8 and 9 of F1116 and the carryover amount is correctly showing on line 10.

However, no tax credit is being calculated or allowed.

Since I checked the lump-sum distribution box (which seems to be the only box to check for retirement income), F4972 popped up. Even though I checked the no boxes indicating the TP was not born before 1936 and did not qualify for lump-sum tax treatment, an error message appears on line B in the lump-sum smart worksheet below line 21 on F1116. The program wants me to enter an amount from F4972. Of course there is nothing from F4972. When I enter the $85K foreign income taxable amount, an error message says that this amount shouldn't be larger than lines 6 and 12 on F4972.

Is the problem the result of checking box g lump-sum distribution category on the wks? The instructions seem to indicate that this is the only income category for retirement income.

When I click box d general category income then the calculation appears to be correct and it is allowing a FTC.

The instructions say that general category is wages. Does it really matter which category I indicate?

I'm tempted to leave it marked as general category income since the calculation is correct. Will this create a problem going forward?

In my first post I mentioned the TP has prior year FTC carryovers in the general income category for wages paid in Canada. Does it matter going forward that the carryovers are a mixture of wages and retirement income?

Thanks for your help.