2016 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 16, 2016

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% 94.16%
Asia Opportunities 76.45% 28.45%
Emerging Europe 91.53% 100.00%
Emerging Markets Stock 100.00% 96.45%
Emerging Markets Value Stock 86.61% 50.07%
European Stock 100.00% 100.00%
Global Growth Stock 100.00% 100.00%
International Concentrated Equity 100.00% 100.00%
International Discovery 100.00% 92.49%
International Equity Index 98.96% 81.40%
International Value Equity1 100.00% 91.67%
International Stock 98.40% 86.75%
Japan 74.84% 97.37%
Latin America 100.00% 64.32%
New Asia 84.45% 29.56%
Overseas Stock 100.00% 97.38%
International/Global Bond Funds
Emerging Markets Local Currency Bond 100.00% 0.00%
International Bond 100.00% 0.00%
Retirement, Spectrum, and Target Funds

Ex-Dividend and Reinvestment Date: December 21, 2016

T. Rowe Price Retirement and Spectrum Funds
  Foreign Source Income Percentage Foreign Source Qualified Dividend Percentage
Retirement 2005 11.02% 10.23%
Retirement 2010 12.03% 11.18%
Retirement 2015 14.80% 13.77%
Retirement 2020 18.94% 17.62%
Retirement 2025 23.47% 21.85%
Retirement 2030 27.93% 26.00%
Retirement 2035 31.55% 29.38%
Retirement 2040 36.90% 34.36%
Retirement 2045 36.72% 34.20%
Retirement 2050 38.38% 35.74%
Retirement 2055 37.63% 35.05%
Retirement 2060 40.57% 37.78%
Retirement Balanced 12.47% 11.59%
Retirement I 2005 - I Class 18.19% 16.92%
Retirement I 2010 - I Class 19.82% 18.45%
Retirement I 2015 - I Class 24.38% 22.70%
Retirement I 2020 - I Class 27.37% 25.49%
Retirement I 2025 - I Class 32.26% 30.05%
Retirement I 2030 - I Class 34.82% 32.44%
Retirement I 2035 - I Class 38.71% 36.08%
Retirement I 2040 - I Class 40.91% 38.13%
Retirement I 2045 - I Class 42.78% 39.87%
Retirement I 2050 - I Class 42.83% 39.92%
Retirement I 2055 - I Class 42.69% 39.79%
Retirement I 2060 - I Class 41.46% 38.65%
Retirement Balanced I - I Class 19.97% 18.59%
Spectrum Growth 42.41% 38.55%
Spectrum Income 0.16% 0.00%
Spectrum International 95.23% 87.28%
Target 20052 11.48% 10.67%
Target 20102 12.53% 11.66%
Target 20152 14.71% 13.69%
Target 20202 19.28% 17.95%
Target 20252 23.54% 21.93%
Target 20302 25.84% 24.07%
Target 20352 28.87% 26.89%
Target 20402 32.45% 30.23%
Target 20452 34.90% 32.52%
Target 20502 39.63% 36.94%
Target 20552 42.23% 39.36%
Target 20602 42.23% 39.37%

1Formerly T. Rowe Price International Growth & Income
2Formerly T. Rowe Price Target Retirement

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.