What is Form 1099-INT?
Form 1099-INT, Interest Income, is a type of Internal Revenue Service (IRS) form that is used to report and record a breakdown of all types of interest income and other related expenses at the end of the year.
Who may file Form 1099-INT?
- The person or entity that gives the payments of interest income
- An organization or institution that paid more than $10 of interest
- The entity that withheld and paid foreign tax on interest
- Payers who withheld federal income tax under the backup withholding rules
How to fill out Form 1099-INT?
Form 1099 requires your personal information.
Enter your full legal name.
Enter your full address, including city or town, state or province, country, and ZIP or postal code.
Enter your active telephone number.
Enter your Tax Identification Number (TIN).
Enter the recipient’s TIN.
Enter the full legal name of the recipient.
Recipient’s street address
Enter the street address and apartment number of the recipient.
FATCA filing requirement box
Check the Foreign Account Tax Compliance Act (FATCA) box if you are a U.S. citizen reporting
on Form 1099-INT to comply with the requirement to report to a U.S. account.
You can also check the box if you are a Foreign Financial Institution (FFI) reporting payments to
a U.S. account pursuant to an election.
Recipient’s account number
The recipient’s account number should be filled out if you check the FATCA filing requirement
box, and if your recipient has multiple accounts.
2nd TIN not.
Enter “X” if the IRS informed you twice within three tax years that the payee provided
an incorrect TIN.
Box 1 — Interest Income
Enter the taxable interest you paid during the tax year.
It may also show the total amount of other things included in the recipient’s interest income such as the credits from clean renewable energy bonds, new clean renewable energy bonds, qualified energy conservation bonds, qualified zone academy bonds, qualified school construction bonds, and build American bonds.
Box 2 — Early Withdrawal Penalty
Enter the amount of interest or principal forfeited due to early withdrawal of time savings.
Box 3 — Interest on U.S. Savings Bonds and Treas. obligations
Enter the interests that are exempted from state and local income taxes such as the interest in U.S. Savings Bonds, Treasury bills, Treasury bonds, and Treasury notes. This may or may not all be taxable.
Box 4 — Federal Income Tax Withheld
Enter the backup withholding. You should backup withhold if the recipient did not furnish his or her TIN or if the recipient did not enter the correct TIN.
Box 5 — Investment Expenses
Enter the amount of the recipient’s share of a single-class Real Estate Mortgage Investment Conduit (REMIC) investment expenses which is not deductible.
REMIC refers to pass-through tax investments in mortgage-backed securities that hold real estate property.
Box 6 — Foreign Tax Paid
Enter the recipient’s foreign tax paid which he or she may claim as a deduction or credit on their Form 1040, U.S. Individual Income Tax Return, or 1040-SR, U.S. Tax Return for Seniors.
Box 7 — Foreign Country or U.S. Possession
Enter the origin country or U.S. possession where the foreign tax was paid.
Box 8 —Tax-exempt Interest
Enter the amount of tax-exempt interest you paid during the year should be put here. This may or may not be subject to backup withholding.
Box 9 — Specified Private Activity Bond Interest
Enter the tax-exempt interest subject to the alternative minimum tax. This amount is also included in box 8.
Box 10 — Market Discount
For taxable covered security, enter the market discount accumulated overtime on the debt instrument during the year the recipient held it.
Unless the taxpayer informed you that he or she did not make a section 1276(b) election, use the constant yield method to determine the market discount accumulated overtime on the debt instrument.
Box 11 — Bond Premium
For taxable covered security other than a U.S. Treasury obligation, the amount of premium amortization from the interest payments should be encoded here, unless the holder informed you that he or she did not want to amortize bond premium.
Leave this box blank if you entered the net amount of interest in box 1.
Box 12 — Bond Premium on Treasury Obligations
For a U.S. Treasury obligation, enter the amount of premium amortization from the interest payments unless the holder informed you that he or she did not want to amortize bond premium. Leave this box blank if you entered the net amount of interest in box 3.
Box 13 — Bond Premium on Tax-exempt Bond
For tax-exempt covered security, encode the amount of premium amortization from the interest payments. Leave this box blank if you entered the net amount of interest in box 8 or 9.
Box 14 — Tax-exempt and Tax Credit Bond CUSIP No.
Enter the Committee on Uniform Securities Identification Procedures (CUSIP) number for a tax-exempt bond where tax-exempt interest was paid, or tax credit bond where taxable interest was paid or tax credit was allowed. A CUSIP number identifies the financial security and instruments of U.S. citizens.
Leave it blank if there is no CUSIP number issued for the said bonds.
Boxes 15 — 17
State tax withheld reporting boxes. You can use these boxes to report payments up to two states. In box 15, enter the name of the state; in box 16, enter your state’s identification number; and, in box 17, enter the amount of state income tax you withheld.
If you have other concerns about reporting on Form 1099-INT, call the information reporting customer service site toll-free at 866-455-7438. If you have a hearing or speech disability with access to TTY/TDD equipment, you can call 304-579-4827 (not toll-free).
How to file Form 1099-INT?
File Copy A of this form with the IRS. If you want to file electronically, download suitable software and generate a file according to the specifications in Pub. 1220. Please note that the IRS does not provide a fillable form option for Copy A.
Complete this form by using the 2020 General Instructions for Certain Information Returns, and the 2020 Instructions for Forms 1099-INT and 1099-OID, U.S. Original Issue Discount. These instructions, and other forms, can be accessed through the official website of the IRS.
Forms 1099-INT and 1098. If you received mortgage interest during your transaction, do not report it on Form 1099-INT. Reporting of mortgage interest should be done on Form 1098, Mortgage Interest Statement.
Foreign recipient. The federal income tax should be withheld if the recipient is a nonresident alien. It is also necessary to file Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding.
Why did I receive a Form 1099-INT?
Recipients of the Form 1099-INT are the individuals, whom the financial institutions or any payers of interest income, have been paid interest during the year. You can utilize this form to organize how much or what kind of income you received this year.
Nominee recipient. If you received this form and it includes amounts belonging to other people, you should fill out Form 1099-INT for each of the owners indicated in the form. File Copy A with the IRS, then Furnish Copy B to each owner. List yourself as the “payer” and the other owner as the “recipient.” File Form 1099-INT with Form 1096, list yourself as the “filer.”
For future developments and the latest information regarding Form 1099-INT and its instructions, such as legislation enacted after they were published, go to the official website of the IRS.
Frequently Asked Questions About Form 1099-INT
When to file Form 1099-INT?
According to the Internal Revenue Service, you must file Form 1099-INT if you have:
- paid more than $10 in interest to a person, including partnerships and other pass-through entities, in the course of your trade or business;
- withheld and paid any foreign tax on interest; or
- withheld and did not refund any federal income tax under the backup withholding rules regardless of the payment amount.
What if I received an incorrect Form 1099-INT?
If you received an incorrect Form 1099-INT, you need to contact your payer for resolution.
Form 1099-INT corrections can be made by filing Form 1096, Annual Summary and Transmittal of U.S. Information Returns, and a corrected Form 1099-INT with the Internal Revenue Service.
When you submit your corrected Form 1099-INT and Form 1096 to the Internal Revenue Service, do not include a written explanation of the reason for the correction and the previously filed and incorrect Form 1099-INT.
Why do I need Form 1096 to file Form 1099-INT?
Form 1096 is used to summarize and transmit paper forms to the Internal Revenue Service (IRS). Without Form 1096 on your paper forms, the IRS will consider your returns incomplete.
To file a paper Form 1099-INT, you need to place it and your completed Form 1096 in a flat mailing envelope. Form 1096 must be attached to the front page of your Form 1099-INT.
However, if you file Form 1099-INT electronically, you do not have to file Form 1096. You must electronically file if you are required to file 250 or more returns with the Internal Revenue Service.
What are the penalties for incorrect Form 1099-INT?
The penalty for filing an incorrect Form 1099-INT is $50 per information return with no maximum penalty.
If you file more than one of the incorrect paper forms or fail to file Form 1096, you will be subject to $110 per return for each incorrect form with no maximum penalty.
When is Form 1099-INT due?
File Form 1099-INT with the Internal Revenue Service (IRS) by February 28. If you are filing a paper Form 1099-INT, file form 1096 as well. Otherwise, the IRS will not accept your Form 1099-INT.
If you are filing electronically instead of on paper, the deadline for filing Form 1099-INT is March 31.
You are required to furnish Copy B of your Form 1099-INT to the recipient or payee by January 31 of the year following the calendar year in which you made the payments.
Can I file Form 1099-INT electronically?
Yes, you can file Form 1099-INT electronically as long as you:
- file 250 or more information returns; or
- use a software package approved by the Internal Revenue Service.
You can use the Filing Information Returns Electronically (FIRE) System of the Internal Revenue Service to file Form 1099-INT if you meet the criteria above.
What is the FIRE System?
The Filing Information Returns Electronically (FIRE) System is a web-based tool that allows you to file information returns electronically to the Internal Revenue Service.
To access the FIRE System, you must have a Transmitter Control Code (TCC), a special five-digit code assigned to each transmitter by the Internal Revenue Service.
How to get a Transmitter Control Code (TCC)?
Before, you need to file Form 4419, Application for Filing Information Returns Electronically (FIRE), to request a TCC. Now, you may get a TCC by completing an IR Application for TCC.
According to the Internal Revenue Service, you may need the following:
- Email address
- Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- Tax filing status and mailing address
- One financial account number linked to your name, such as the last eight digits of your credit card number, your student loan account number provided on your statement, mortgage or home equity loan, home equity line of credit (HELOC,) or auto loan
- A mobile phone linked to your name for faster registration or to receive an activation code by mail
What if I have a TCC but cannot access the FIRE System?
There are many reasons why you cannot access the FIRE System, such as:
- You changed your Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- You accessed the FIRE System from a different computer than usual and cannot access the FIRE System because the previous computer is no longer accessible
- Your email address on file has expired
- Your bank account number has changed for Direct Deposit
- Your firm has a new address or changed its name
- You have not filed any returns through the FIRE System in the last two years and need a new TCC number to file information returns
To access the FIRE System, you need to update your Transmitter Control Code (TCC) by filing Form 4419, or you need to start a new application by submitting the IR Application for TCC.
Can I print Form 1099-INT?
The Internal Revenue Service prohibits all filers from printing Copy A of Form 1099-INT on any website for scanning and identity verification purposes. If you do so, the Internal Revenue Service may penalize you for printing unscannable information returns.
To order a scannable Copy A of Form 1099-INT, you may visit the official website of the Internal Revenue Service.
However, Copy 1, Copy B, Copy 2, and Copy C of Form 1099-INT from any website may be downloaded and printed.
Do I need to attach Form 1099-INT when I file my tax returns?
No. You do not have to attach the Form 1099-INT you received when you file your tax returns. You only need the amount or information on your Form 1099-INT to file your tax returns.
How is interest income reported on Form 1099-INT?
According to the Internal Revenue Service, Form 1099-INT provides information on the interest you received or credited to your account. It is important that you report all of this interest as taxable income on your tax return unless you exclude it under certain circumstances such as:
- You received a Form 1099-INT for U.S. Treasury bills, notes, or bonds
- You received a total interest of $10 or less from bank accounts, loans, mortgages, sold personal property, securities held in a regular brokerage account, credit card debt forgiven by the lender, or repaid by your insurance policy
- You received Form 1099-INT that includes amounts belonging to another person, such as your spouse
- The interest is required to be reported on another form or schedule instead of Form 1099-INT, such as Form 1098, Mortgage Interest Statement, for mortgage interest
What are the tax consequences of receiving a Form 1099-INT?
If you receive Form 1099-INT, you are responsible for reporting all of the information on that form on your tax return. You must file Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Tax Return for Seniors, to report your interest income.
What is an interest income?
An interest income is the amount of money earned by investing your money. For example, if you deposited money into a certificate of deposit (CD), your bank may pay you interest every year for your investment.
Another common example is when someone invests in stocks, where any dividends earned from those stocks are also considered an interest income.
An interest income is different from an interest expense, which is the amount of money you paid on your debt for a financial account, such as a loan.
What is the difference between a principal and an interest income?
The money you originally deposited into your account is called a principal or original proceeds. The money you earn from your principal is called an interest income.
For example, you invested $1,000 in a savings account, and your bank pays you 10% interest per year. Your interest income is $100, and your principal is $1,000.
Some banks pay interest more frequently than once a year. For example, some banks will credit your account with new interest every month instead of paying it all at once. In such a case, your interest income may be credited to your account every month instead of being paid in one lump sum after a year.
Do I have to report bank interest income?
Yes. You are required to report all of the information on Form 1099-INT, including your bank interest income.
A bank interest income is the money that you earn by depositing your money into a bank. It is taxable and must be reported to the Internal Revenue Service.
In addition, you need to report your bank interest income on your tax returns even if you did not receive Form 1099-INT.
Is receiving Form 1099-INT good or bad?
Receiving Form 1099-INT from your payer does not mean it is good or bad. It is simply a form that provides information regarding your financial interests in a calendar year to the Internal Revenue Service, including any interest you received from banks, finance companies, real estate agencies, and other institutions.
As a payee, your Form 1099-INT contains your limited personal information or identification, making it less likely that you will be a victim of identity theft.
Is Form 1099-INT the same as Form 1099-DIV?
No. While Form 1099-INT is used to report your interest income, Form 1099-DIV, Dividends and Distributions, is used to report any dividends you received from stocks or mutual funds.
Form 1099-DIV includes dividend income that you received from stocks or mutual funds. It is provided by companies who are required to pay out dividends, including corporations, mutual funds, brokers, dealers in securities, tax-exempt organizations, real estate investment trusts (REITs), regulated investment companies (RICs), or real estate trusts (REITs).
Does receiving a Form 1099-INT mean that I must pay taxes on my interest income?
No. When you receive Form 1099-INT, it does not automatically mean that you are required to pay tax on your interest income. You do not need to pay taxes if your interest income is below the filing threshold.
Also, you may not need to pay taxes on your income interest if it falls under the category of tax-exempt income.
Tax-exempt means that you do not need to pay any taxes on a particular type of income. Certain types of income that you do not need to report as taxable are gifts and inheritances.
For example, if someone gives you $10,000 in cash as a gift, that $10,000 is not taxable.
Also, if you inherit $100,000 from a relative who died and named no one as an heir, the $100,000 is tax-exempt income. However, inheritances, where the individual's estate is the beneficiary, are considered taxable income.
Other examples are the interest paid on life insurance policies or endowment, annuity, or disability contracts.
Does Form 1099-INT include dividends?
No. Form 1099-INT only includes interest that you have been paid or credited from banks, finance companies, real estate agencies, and other institutions. The majority of dividends are reported on Form 1099-DIV.
Will my bank send me Form 1099-INT?
Most banks do not send Form 1099-INT unless your interest income from deposits exceeds $10.
If you are required to report interest income on your tax return but did not receive Form 1099-INT from your bank, but they filed your Form 1099-INT to the Internal Revenue Service (IRS), you need to contact the bank or institution and ask for a copy of Form 1099-INT.
Will the IRS catch a missing Form 1099-INT?
Yes, if the Internal Revenue Service audits your tax return.
If you did not receive Form 1099-INT, and you are required to report your interest income on your tax return, you may request the information from the payer to avoid potential penalties for non-compliance.
Why did my bank not send me Form 1099-INT?
The bank may have decided that the income you received from them was too low to send Form 1099-INT.
Your bank is not obligated to furnish you Form 1099-INT for interests that are lower than $10.
If you do not know the amount of your interest income, contact your bank directly about it.
Take note that even if your bank decides not to report your above $10 interest income, you must still get Form 1099-INT from them.
How will I know the amount of my interest income if I did not receive Form 1099-INT?
Without Form 1099-INT, you would not know how much interest income to report. If you need a copy of Form 1099-INT for the previous tax year, contact the bank or institution that reported your interest earnings on their form and ask them for it.
If they send you Form 1099-INT and your interest income is below the filing threshold, you still need to report the amount to the Internal Revenue Service.
What if I lost my 1099-INT?
If you lose your Form 1099-INT, you may contact the bank or institution that reported your interest earnings to determine the amount you need to report on your tax returns.
Remember that financial institutions do not have an obligation to report any specific amount of income on your account, but only those that surpass $10.
Therefore, if they inform you that there is no applicable Form 1099-INT for your financial records, you need to contact them again and ask for a statement of the interest income or withdrawals made from your account instead.
Will I get audited if I forgot Form 1099-INT?
If your income is below your filing threshold and you do not receive Form 1099-INT, the Internal Revenue Service (IRS) may not audit you.
However, if you omit or understate any of your interest income, it will more likely trigger an inquiry from the IRS on why they did not receive Form 1099-INT.
Most importantly, you need to know that even if your financial institution does not send you Form 1099-INT, you are still responsible for reporting your interest income on your tax returns regardless of how much it is.
How do I amend Form 1099-INT?
To amend your Form 1099-INT, you must send a letter to the financial institution that reported your interest earnings.
In the letter, ask them for a corrected Form 1099-INT with all of its information intact and as it appeared on last year's form.
Remember that the payer is the only one to amend the Form 1099-INT you received.
What happens if my Form 1099-INT doesn't have a state listed?
If your Form 1099-INT does not have a state listed, you may ask the payer for a state identification number.
Alternatively, you can use the payer's address and mark "unknown," provided that it is, in fact, an unknown state.
How much is the tax rate on interest income?
As of 2021, the tax rate on interest income is equivalent to your tax bracket.
For example, if you are a single filer and have an average of $10 in interest earnings from Form 1099-INT per year, then it is likely that you will fall under the 10% marginal tax bracket.
Therefore, for this example, you owe 10% on your Form 1099-INT interest as your interest income is taxed at the same rate as your marginal tax bracket.
However, if your Form 1099-INT shows less than $10 in interest earnings, then it is not considered taxable by law. You may choose to report it as taxable or report zero on your tax return.