Tax equilization refund ??

[taxgirl]

I have a new GE client who worked overseas in previous years and received a letter from his employer referencing a Host Tax Refund from 2014 resulting from a tax equalization payment. Since this is a refund, does it get reported?

[Burke]

Was it a refund from the other country? It depends on how the foreign tax was treated on the US return. Was a Form 1116 filed for that year?

[taxgirl]

In 2015, he received a letter stating that the company owed him $6489 based on the tax equalization calculation of 2014's return. His 1040 reflected a balance due of $4713 (2014). In 2017 received a letter referencing 2014 Host Tax Refund of $6318.71. There was a 1116 filed in 2014 reflecting a foreign tax credit of $41,698 which carried over to line 48 on the 1040.