U.S. tax credits


Form 1116

To avoid double taxation of the same income in The Netherlands and the U.S., you are allowed to claim a deduction in either country, depending on directions from the Income Tax Treaty. You can take a credit for Dutch tax paid or accrued on your Dutch sourced income by filing Form 1116.

Such income includes amongst others:

general category income – amongst others, employment income above the amount excluded by filing the Form 2555 (the credit cannot be used for the amount which was excluded), pension distributions, severance payments, unemployment benefits. You can only use your Dutch Box 1 tax for this income category.

passive category income - interests, dividends or other investment income. You can only use your Dutch Box 3 tax for this income category.

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Form 1116 Foreign Tax Credit