A soft-decision forward error correction scheme for received optical signals is described. Differential decoding may be performed, for example, in each polarization after coherent QPSK detection. Hard decisions may be made based on judging the most likely transition between each pair of received input symbols. Soft-input generation is also described, representing the reliability of the hard decisions. The soft-input information may be generated through simplified algorithms that utilize the most likely transitions to determine a reliability assignment.