Understanding Form 1099-INT: Interest Income Reporting

What Form 1099-INT reports

Form 1099-INT is the document your bank, credit union, brokerage, or other financial institution sends you when you earn interest on money you have on deposit with them. The form lists the total interest paid to your account during the calendar year and goes to both you and the Internal Revenue Service (IRS).

You receive this form if you earned $10 or more in interest during the year. The threshold is $10 — not a higher amount — so even small savings accounts or money market funds can trigger a 1099-INT if they generate enough interest. Financial institutions are required to send the form by January 31 of the following year.

The interest reported on Form 1099-INT is taxable income. You report it on your federal tax return, and depending on your state, you may also report it on a state return. The IRS uses the copy sent to them to cross-check your reported income against what institutions reported you earned.

Key Takeaways

• Form 1099-INT reports interest income of $10 or more earned during the calendar year from banks, credit unions, brokerages, and other financial institutions.
• You receive the form by January 31, and the IRS receives a copy at the same time, so the income you report must match what the form shows.
• Interest reported on 1099-INT is ordinary income and is taxed at your regular income tax rate, not at capital gains rates.
• You report the interest on your federal return on Schedule 1 (Form 1040) and may also owe state income tax on the amount.
• If you did not receive a 1099-INT but earned interest, contact the financial institution; if you received one with errors, request a corrected form (Form 1099-INT Corrected).

Where interest income appears on the form

Form 1099-INT has several boxes, but the main ones you need to know are Box 1 and Box 3. Box 1 shows the total interest paid to you during the year. This is the number you report on your tax return. Box 3 shows U.S. savings bond interest, which is reported separately because it has different tax timing rules.

Other boxes on the form report interest that was withheld for federal taxes (Box 4), state taxes (Box 5), and foreign taxes (Box 6). If your financial institution withheld taxes from your interest, those amounts appear here. You use these figures when you file your return to claim credit for taxes already paid.

The form also shows the financial institution's name, your name, your Social Security number or tax ID, and the institution's tax ID. Check that your name and Social Security number are correct — errors here can cause problems when the IRS matches your return to the reported income.

Types of accounts that generate 1099-INT

Savings accounts, money market accounts, and certificates of deposit (CDs) at banks and credit unions almost always generate a 1099-INT if interest exceeds $10. Interest-bearing checking accounts also produce the form. Any account where a financial institution pays you interest for letting them hold your money will trigger reporting.

Brokerage accounts that hold bonds or bond funds generate 1099-INT for the interest those bonds pay. Treasury bills, Treasury notes, and Treasury bonds all produce 1099-INT forms. Some brokerage accounts also pay interest on cash balances held in the account.

Accounts that do not generate 1099-INT include regular checking accounts (which typically pay no interest), retirement accounts like IRAs and 401(k)s (which have separate reporting), and taxable brokerage accounts holding only stocks (which report dividends on Form 1099-DIV instead).

How interest income is taxed

Interest reported on Form 1099-INT is taxed as ordinary income, meaning it is taxed at your regular income tax rate. If you are in the 22 percent federal tax bracket, the interest is taxed at 22 percent. This is different from long-term capital gains, which have lower tax rates.

The amount of tax you owe depends on your total income for the year and your filing status. A small amount of interest income may not change your tax bracket, but large amounts can push you into a higher one. You report the interest on Schedule 1 (Form 1040) under "Interest" and add it to your other income.

State income tax also applies to interest in most states. If you live in a state with income tax, you report the same interest amount on your state return. A few states do not tax interest income, but most do. Check your state's tax rules or your state tax form to see how interest is treated.

What to do if you did not receive a 1099-INT

If you earned interest but did not receive a Form 1099-INT by early February, contact the financial institution directly. Ask them to send you a copy. They may have the wrong mailing address on file, or they may have determined the interest fell below $10 (though you should verify this).

If the institution confirms they sent it and you still have not received it after two weeks, ask them to mail a duplicate copy or provide the information electronically. Keep a record of when you requested it and who you spoke with.

You are still required to report the interest income on your tax return even if you do not receive the form. If you have statements from the institution showing the interest paid, use those to calculate the amount to report.

Correcting errors on Form 1099-INT

If the amount on Form 1099-INT is wrong, or if your name or Social Security number is incorrect, contact the financial institution and ask them to issue a corrected form. The corrected form is called Form 1099-INT Corrected and will be marked as a correction.

The institution must send the corrected form to you and the IRS. Once you receive it, use the corrected amount when you file your return. If you have already filed your return with the wrong amount, you will need to file an amended return (Form 1040-X) to correct it.

Do not ignore the error and file based on your own records if they differ from the 1099-INT. The IRS will see the form the institution sent and will expect your return to match. If there is a discrepancy, the IRS may send you a notice asking for an explanation or demanding additional tax.

Interest from retirement accounts and special situations

Interest earned inside a traditional IRA, Roth IRA, or 401(k) is not reported on Form 1099-INT. These accounts have tax-deferred or tax-free growth, so interest is not taxed in the year it is earned. When you withdraw money from the account, that withdrawal is reported separately on forms like Form 1099-R.

Interest on bonds held in a taxable brokerage account is reported on 1099-INT. Interest on U.S. Treasury securities is reported on 1099-INT but is exempt from state and local income tax (though still subject to federal tax). Interest on municipal bonds is usually exempt from federal tax and may be exempt from state tax, and it appears on 1099-INT but is marked as tax-exempt interest.

If you earned interest as a minor and your parent claimed you as a dependent, you still report the interest on your own return. Your parent cannot report it on their return. However, if the interest is very small, there are special rules (the "kiddie tax") that may explore — check IRS guidance or a tax professional for your specific situation.

Frequently Asked Questions

Do I have to report interest if I earned less than $10?

Financial institutions are not required to send you a 1099-INT if interest is under $10, but you are still required to report all interest income on your tax return, regardless of the amount. If you earned $5 in interest, you must report it. Keep your bank statements as proof of the amount.

What if I have multiple accounts at different banks?

Each bank sends you a separate 1099-INT for each account that earned $10 or more in interest. You add up all the interest from all the forms and report the total on your tax return. The IRS receives copies of all the forms, so make sure your reported total matches the sum of all forms sent to the IRS.

Can I deduct expenses against interest income?

No. Interest income is reported as-is on your return. You cannot deduct account fees, investment advisory fees, or other costs against interest income to reduce the taxable amount. Some investment expenses may be deductible in other ways, but not as an offset to interest reported on 1099-INT.

Is interest from a savings account at a credit union reported the same way as a bank?

Yes. Credit unions report interest on Form 1099-INT just like banks do. The form, the $10 threshold, the reporting important date, and the tax treatment are all the same whether the interest comes from a bank, credit union, or other financial institution.

What happens if the 1099-INT amount does not match my bank statement?

Contact the bank and ask them to explain the difference. The 1099-INT should match your year-end statement. Possible reasons for a mismatch include interest posted after the form was prepared, interest withheld for taxes, or a calculation error. Ask the bank to send a corrected form if there is an error on their end.