International Tax Law:

Tax Credit for Foreign Taxes on Overseas Investments

If you paid anything over $300 for a single filer and over $600 for a joint filer in foreign taxes, you have to file Form 1116 with the IRS. But if you paid less then these amounts in foreign taxes, you can claim them as tax credit on your Form 1040 without filing the form.

This was done to make it easier on the small investors who were reluctant to fill out the complicated Form 1116.

The great advantage of a tax credit is that it's dollar for dollar, meaning it's money in your hand.