2017 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 6 of your Form 1099-DIV on Form 1040, Schedule A, Line 8. 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 6 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 6 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 28% 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, reduce the "Foreign Source Income Percentage" in the table below by an amount equal to the "Foreign Source Qualified Dividend Percentage" below, multiplied by a factor. This factor is (x) the difference between the highest marginal income tax rate and your lower qualified dividend tax rate, divided by (y) 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 18, 2017

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% 74.73%
Asia Opportunities 100.00% 100.00%
Emerging Europe 100.00% 100.00%
Emerging Markets Stock 100.00% 100.00%
Emerging Markets Value Stock 59.41% 36.31%
European Stock 100.00% 100.00%
Global Growth Stock 21.11% 18.38%
Global Industrials 16.64% 17.53%
International Concentrated Equity 35.42% 34.12%
International Discovery 51.48% 45.09%
International Equity Index 89.97% 76.27%
International Stock 69.69% 61.50%
International Value Equity 92.88%

87.35%

Japan 99.75% 100.00%
Latin America 68.87% 31.64%
New Asia 48.21% 19.95%
Overseas Stock 100.00% 99.57%
International/Global Bond Funds
Emerging Markets Bond1 100.00% 0.00%
Emerging Markets Local Currency Bond 100.00% 0.00%
International Bond1 100.00% 0.00%
Retirement, Spectrum, and Target Funds

Ex-Dividend and Reinvestment Date: December 21, 2017

T. Rowe Price Retirement and Spectrum Funds
  Foreign Source Income Percentage Foreign Source Qualified Dividend Percentage
Retirement 2005
19.26%
8.41%
Retirement 2010
20.39%
9.93%
Retirement 2015
20.40%
11.89%
Retirement 2020
23.81%
14.75%
Retirement 2025
25.32%
17.14%
Retirement 2030
27.80%
20.49%
Retirement 2035
28.51%
22.32%
Retirement 2040
30.27%
25.14%
Retirement 2045
30.94%
26.35%
Retirement 2050
30.74%
26.19%
Retirement 2055
30.61%
26.07%
Retirement 2060
31.89%
27.52%
Retirement Balanced
18.93%
10.36%
Retirment Income 20202
39.55%
31.89%
Retirement I 2005 - I Class
21.97%
10.18%
Retirement I 2010 - I Class
22.08%
11.04%
Retirement I 2015 - I Class
24.40%
13.69%
Retirement I 2020 - I Class
26.07%
16.76%
Retirement I 2025 - I Class
27.38%
19.28%
Retirement I 2030 - I Class
29.04%
21.95%
Retirement I 2035 - I Class
29.98%
24.08%
Retirement I 2040 - I Class
30.70%
25.90%
Retirement I 2045 - I Class
30.77%
26.62%
Retirement I 2050 - I Class
30.87%
26.67%
Retirement I 2055 - I Class
30.61%
26.60%
Retirement I 2060 - I Class
30.75%
27.04%
Retirement Balanced I - I Class
20.49%
10.96%
Spectrum Growth
31.95%
29.29%
Spectrum Income
24.10%
0.00%
Spectrum International
80.76%
72.35%
Target 2005
19.46%
9.23%
Target 2010
18.70%
9.23%
Target 2015
20.07%
10.50%
Target 2020
22.48%
13.47%
Target 2025
23.17%
15.19%
Target 2030
25.78%
17.85%
Target 2035
26.86%
19.32%
Target 2040
28.59%
21.48%
Target 2045
30.73%
24.25%
Target 2050
32.03%
26.51%
Target 2055
31.44%
26.93%
Target 2060
32.86%
28.86%

1The Ex-Dividend and Reinvestment Date is December 29, 2017.
2The Ex-Dividend and Reinvestment Date is December 28, 2017.

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 and Portfolio and Portfolio—II classes). For more information, please visit our website for financial intermediaries at www.troweprice.com/fi/distributions.