What Is the Definition of Form 1099-INT?

Form 1099-INT, Interest Income, is an information return used in the United States tax system to report interest payments made by an entity to a recipient during a calendar year. The payer, such as a bank or brokerage firm, sends this form to both the person who received the interest and the Internal Revenue Service (IRS). The form serves as an official record of interest earned, which is a component of a taxpayer’s gross income.

Who Issues and Receives Form 1099-INT

The responsibility for issuing Form 1099-INT lies with the “payer,” which is any entity that pays interest. Common payers include banks, credit unions, and brokerage firms that manage interest-bearing accounts. The “recipient” is the individual or entity that earned the interest.

An entity must file a Form 1099-INT for each person to whom it paid at least $10 in interest during the year. The requirement also triggers if any federal income tax was withheld under backup withholding rules, regardless of the payment amount. Payers are required to send the form to the recipient by January 31 of the year following the tax year in which the interest was paid.

Understanding the Information on Form 1099-INT

Form 1099-INT uses a series of numbered boxes to detail the financial information being reported.

• Box 1, Interest Income: This box shows the total amount of taxable interest paid to the recipient during the year. This figure includes interest from bank accounts, credit union share accounts, and interest-bearing checking accounts, and it represents income subject to federal income tax.
• Box 3, Interest on U.S. Savings Bonds and Treasury obligations: This reports interest earned from federal debt instruments, such as Treasury bills, notes, and bonds. While this interest is subject to federal income tax, it is exempt from state and local income taxes.
• Box 4, Federal income tax withheld: This shows any amount withheld from interest payments and sent to the IRS. This happens under backup withholding rules, which can be required if the recipient failed to provide a correct taxpayer identification number. This amount represents a credit for taxes already paid.
• Box 8, Tax-exempt interest: This reports interest that is not subject to federal income tax, generated by bonds issued by state and local governments, often called municipal bonds. Although federally tax-exempt, it must be reported on the tax return for informational purposes.

Reporting Interest Income on Your Tax Return

The amounts from Form 1099-INT are reported on your federal income tax return, Form 1040. Taxable interest from Box 1 is entered on your return. If your total taxable interest income for the year is more than $1,500, you are required to complete and attach Schedule B, Interest and Ordinary Dividends. The total from Schedule B is then carried over to the “Taxable interest” line on Form 1040.

Tax-exempt interest from Box 8 is entered on the “Tax-exempt interest” line of Form 1040. While this income is not added to your taxable income, the IRS requires it for informational purposes. Any federal income tax withheld, shown in Box 4, is reported in the payments section of Form 1040 and can reduce your tax liability or increase your refund.

Common Scenarios and Corrections

You are legally obligated to report all interest income you earned, even if you do not receive a Form 1099-INT. This may happen if you earned less than the $10 reporting threshold from a payer. In this case, use your own records, such as bank statements, to determine the correct amount of interest to report.

If you receive a Form 1099-INT that contains an error, contact the payer who issued it to request a corrected form. The payer is responsible for issuing a new form and filing it with the IRS, as discrepancies between what the payer reports and what you report can lead to notices or adjustments.