What the 1099-INT Form Means and Who Receives It

The 1099-INT reports interest income you earned from banks, credit unions, and other financial institutions

A 1099-INT is a tax form that reports interest paid to you during the year. Banks, credit unions, brokerage firms, and other financial institutions send you this form when the interest they paid you reaches a certain threshold. The form shows how much interest you earned on savings accounts, money market accounts, certificates of deposit (CDs), and similar products.

You receive a 1099-INT because the IRS requires financial institutions to report interest payments to both you and the tax agency. This is how the IRS tracks income that might otherwise go unreported. Even if you don't receive a 1099-INT, you still owe tax on all interest you earned during the year — the form is just documentation of what the institution reported.

The threshold for receiving a 1099-INT varies by institution but is often $10 or more in annual interest. Some institutions may send you one even if interest is below $10, and some may not send one even if you earned interest. Check with your bank or financial institution to understand their specific reporting practices.

Key Takeaways

• A 1099-INT reports interest income paid to you by banks, credit unions, and investment firms during the tax year.
• You must report all interest income on your tax return, whether or not you receive a 1099-INT form.
• The form is sent to you by January 31 of the year following the tax year in which you earned the interest.
• Interest reported on a 1099-INT is added to your other income and taxed at your ordinary income tax rate.
• If you receive multiple 1099-INT forms from different institutions, you add all the interest amounts together on your tax return.

Where the 1099-INT appears on your tax return

Interest income from a 1099-INT goes on Schedule B (Interest and Ordinary Dividends) if you have more than $1,500 in interest or dividend income for the year. If your interest is $1,500 or less and you have no other investment income, you can report it directly on Form 1040 without filing Schedule B.

On Schedule B, you list each 1099-INT separately by the name of the institution that issued it and the amount shown in Box 1 (interest income). You then add all interest amounts together and transfer the total to Form 1040. This total becomes part of your taxable income for the year.

If you earned interest in a joint account, the 1099-INT may show the full amount even though you and the other account holder should split the income. You and the other owner need to decide how to divide it — usually equally unless you have a different agreement — and each report your share on your own tax return.

What each box on the form tells you

Box 1 shows the total interest paid to you during the year. This is the number you use on your tax return. Box 2 shows U.S. Savings Bond interest, which is reported separately because it may have different tax treatment. Box 3 shows interest on bonds issued by states or cities (municipal bond interest), which is usually not taxable at the federal level.

Box 4 reports federal income tax withheld from your interest, if any. This happens rarely with regular interest income but may occur in certain situations. Box 5 shows interest earned on bonds issued by U.S. possessions. Box 6 reports interest from certain savings bonds or Treasury securities.

The remaining boxes (7 through 13) handle less common situations: foreign tax paid, foreign country information, and market discount. Most people with straightforward savings accounts or CDs will only need to look at Box 1.

Common reasons you might not receive a 1099-INT

If you earned very little interest — often less than $10 — your financial institution may not send you a 1099-INT. This does not mean you should ignore the income. You still owe tax on it, and you can find the amount on your account statements or by logging into your online banking portal.

Some institutions send 1099-INTs only to customers who earned interest above their internal threshold, which may be higher than the IRS minimum. If you earned interest but did not receive a form, contact the institution and ask whether they issued one. You can also request a corrected form or a statement showing your interest earnings.

Interest earned in an IRA, 401(k), or other retirement account is not reported on a 1099-INT because it grows tax-deferred inside the account. You only report income when you withdraw money from the account, and that withdrawal is reported on a different form (such as a 1099-R for retirement distributions).

How interest income affects your taxes

Interest income is taxed as ordinary income, meaning it is added to your wages, self-employment income, and other earnings and taxed at your regular tax rate. If you are in the 22% tax bracket, interest is taxed at 22%. If you are in the 12% bracket, it is taxed at 12%. There is no special lower rate for interest like there is for long-term capital gains.

Interest income can push you into a higher tax bracket if your total income crosses a threshold. For example, if you earned $50,000 in wages and $5,000 in interest, your taxable income is $55,000, which may be taxed at a higher rate than your wages alone would have been.

Interest income also counts toward your Modified Adjusted Gross Income (MAGI), which determines whether you can use certain tax deductions and credits. High interest income can reduce or eliminate your ability to claim the Earned Income Tax Credit, the Saver's Credit, or education-related credits.

What to do if you find an error on your 1099-INT

If the amount on the 1099-INT does not match your account records, contact the financial institution that issued it. Ask them to verify the amount and issue a corrected form (called a 1099-INT corrected) if needed. The institution must send the corrected form to you and to the IRS.

Do not ignore the discrepancy and report a different number on your tax return. If the IRS receives a 1099-INT showing $500 in interest but your return shows $300, the IRS computer will flag the difference and you may receive a notice asking you to explain or pay additional tax.

Keep your account statements for at least three years. If the IRS questions your return, you can use the statements to show what interest you actually earned. If the institution made an error and issued a corrected 1099-INT after you filed, you may need to file an amended return (Form 1040-X) to correct your tax return.

Interest from different account types

Savings accounts, money market accounts, and CDs all generate interest reported on a 1099-INT. The interest rate varies widely depending on the institution and the current economic environment. High-yield savings accounts may pay significantly more interest than traditional savings accounts at large banks.

Treasury bills, notes, and bonds also generate interest, though the form used to report it may be different (1099-INT for some, 1099-OID for others, depending on how the security was purchased). Interest on I Bonds and EE Bonds is reported on a 1099-INT when you redeem the bond or when the bond matures, not each year you hold it.

Interest earned through peer-to-peer lending platforms or other alternative investments may also be reported on a 1099-INT. Always check the tax documents sent to you by any institution where you earn interest, as the reporting method can vary.

Frequently Asked Questions

Do I have to report interest income if I didn't receive a 1099-INT?

Yes. You owe tax on all interest you earned during the year, regardless of whether you received a 1099-INT. If you earned interest but did not receive a form, check your account statements and report the amount on your tax return. The IRS may not have a record of it, but that does not change your tax obligation.

What if I earned interest in multiple accounts at the same bank?

You may receive one 1099-INT that combines interest from all your accounts at that institution, or you may receive separate forms for each account. Either way, you add all the interest together and report the total on Schedule B. The form will show the combined amount if the bank consolidated it.

Is interest from a joint account taxed differently?

The 1099-INT shows the full amount of interest earned, but you and the other account owner should each report your share based on how you own the account. If you own it equally, you each report half. You may need to file a separate statement with your return explaining how you divided the income, depending on your situation.

Can I deduct interest I paid on a loan from interest I earned?

No. Interest you earned (reported on a 1099-INT) and interest you paid on a loan are reported separately and do not offset each other. Interest paid on a mortgage or student loan may be deductible in certain situations, but that deduction is separate from the interest income you report.

What happens if the 1099-INT amount is wrong but I already filed my return?

If you discover an error after filing, contact the financial institution and ask for a corrected 1099-INT. Once you receive it, you will likely need to file an amended return (Form 1040-X) to correct your tax return. The IRS may also contact you if they receive a corrected form that differs from what you reported.