What Is a 1099-INT Form From the IRS?

Form 1099-INT is an information return used to report interest income. Financial institutions like banks, credit unions, and brokerages are required to send this form to individuals and the IRS if they pay out at least $10 in interest during a calendar year. This includes interest earned on savings accounts, interest-bearing checking accounts, and certificates of deposit. Receiving a Form 1099-INT signifies that you have earned interest income that likely needs to be reported on your federal tax return.

Decoding the Boxes on Form 1099-INT

Each box on Form 1099-INT reports a specific type of interest or related information. Box 1 shows the total amount of taxable interest you received from the payer. This amount is taxable at your ordinary income tax rate and includes interest from bank accounts, CDs, and other similar sources.

Box 3 reports interest earned on U.S. Savings Bonds, Treasury bills, notes, and bonds. While this interest is subject to federal income tax, it is exempt from state and local income taxes. Box 8 shows tax-exempt interest, which comes from investments in municipal bonds. Although this interest is not taxed at the federal level, it still must be reported on your tax return.

Box 4 shows any federal income tax that was withheld from your interest payments. This is not common but can occur under backup withholding rules, for instance, if you previously provided an incorrect taxpayer identification number to the payer. The amount in Box 4 represents taxes you have already paid, which can reduce your tax liability or increase your refund.

Reporting Interest Income on Your Tax Return

You must transfer the figures from your Form 1099-INT to your Form 1040 tax return. The total taxable interest from Box 1 of all your 1099-INT forms is reported on the “taxable interest” line of your Form 1040.

If your total taxable interest income for the year is more than $1,500, IRS rules require you to complete and attach Schedule B, “Interest and Ordinary Dividends,” to your Form 1040. This schedule requires you to list each payer’s name and the amount of interest you received from them. The total from Schedule B is then carried over to the taxable interest line on your Form 1040.

Tax-exempt interest from Box 8 must be reported on the “tax-exempt interest” line of Form 1040. While this income is not subject to federal tax, the IRS uses this information in calculations that could affect the taxability of other income, such as Social Security benefits. Any federal tax withheld, shown in Box 4, is reported in the payments section of Form 1040.

Addressing Form Errors or Missing Forms

If you receive a Form 1099-INT with an error, such as an incorrect interest amount, contact the payer that issued the form. Inform them of the error and request a corrected Form 1099-INT, which they are responsible for issuing to both you and the IRS.

If you earned more than $10 in interest but did not receive a Form 1099-INT by the January 31 deadline, you are still legally obligated to report it. Review your financial records, such as bank statements, to determine the amount of interest earned and report this income on your tax return.