Do I Need to File a 1099-INT for Interest Income?

Form 1099-INT serves as a common tax document that reports interest income earned by individuals throughout the year. This form provides a summary of interest payments received from various financial sources. Its purpose is to ensure that taxpayers have the necessary information to accurately report their interest earnings to the Internal Revenue Service (IRS) when preparing their annual income tax returns.

What a 1099-INT Reports

Form 1099-INT details specific types of interest income that financial institutions pay to individuals. This includes interest earned from traditional savings accounts, money market accounts, certificates of deposit (CDs), and corporate bonds. Financial entities such as banks, credit unions, and brokerage firms are typically responsible for issuing these forms.

The form contains several boxes that itemize different categories of interest. Box 1, for instance, shows the total taxable interest received. Other important boxes may include an early withdrawal penalty (Box 2) if funds were withdrawn from an account before maturity, or foreign tax paid (Box 6) on interest earnings. Additionally, tax-exempt interest, often from municipal bonds, is reported in Box 8, even though it is generally not subject to federal income tax.

When a 1099-INT Is Required

A financial institution is required to issue a Form 1099-INT to you and the IRS if the interest paid to you totals $10 or more during the tax year. This $10 threshold applies to most types of interest, including that from savings accounts and bonds. However, a 1099-INT is also required if any amount of federal income tax was withheld from your interest payments under backup withholding rules, or if at least $10 in foreign tax was withheld. Even if interest earned does not meet the $10 threshold, all interest income received is taxable. Individuals must report all interest income on their federal tax return, regardless of the amount.

Reporting Interest Income on Your Tax Return

Once you receive your Form 1099-INT, the information provided on it is used to report your interest income on your federal income tax return. For most taxpayers, interest income is reported directly on Form 1040, typically on line 2b, if the total taxable interest is less than $1,500. If you received interest from multiple financial institutions, you will likely receive a separate Form 1099-INT from each, and you should use the information from all these forms.

If your total taxable interest income exceeds $1,500 for the year, or if you have certain other specific situations like tax-exempt interest or bond premium amortization, you must file Schedule B (Form 1040), Interest and Ordinary Dividends. On Schedule B, you list each payer and the corresponding interest amount. The total from Schedule B then transfers to the appropriate line on your Form 1040. If you earned interest but did not receive a 1099-INT because the amount was below the reporting threshold, you still report this income, often by simply entering the payer’s name and the amount of interest received in the interest income section of your tax software or forms.

Addressing Missing or Incorrect 1099-INT Forms

If you believe you should have received a Form 1099-INT but did not, or if the form you received contains errors, there are specific steps you can take. Financial institutions typically mail these forms by January 31st of the year following the tax year. If you haven’t received it by mid-February, you should first contact the payer, such as your bank or brokerage firm, to request a copy or inquire about its status. Many institutions also provide electronic access to tax documents through their online portals.

If a Form 1099-INT has incorrect information, contact the payer and request a corrected form. The payer will typically issue a corrected Form 1099-INT by checking the “corrected” box on the new form. If the error is not resolved by the time you need to file, you should report the correct amount of income on your tax return, as the IRS receives a copy of the form and discrepancies might lead to an inquiry.