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What is Form 1099-INT?
Form 1099-INT is an information return used to report interest income paid to taxpayers during the tax year. Financial institutions, including banks, credit unions, and other entities that pay interest, must send this form to both the recipient and the IRS to ensure proper reporting of interest earnings.
Who's Involved with Form 1099-INT?
Payers Required to File
Any entity that pays $10 or more in interest during the tax year must issue a 1099-INT. This includes:
• Banks and credit unions
• Savings and loan associations
• Investment companies
• Brokers
• Business entities paying interest on loans
Recipients
You'll receive a 1099-INT if you:
• Earned $10 or more in interest from any single source
• Received foreign tax payments or foreign source interest
• Had federal income tax withheld from interest payments
Important Deadlines and Thresholds
• Payers must send Form 1099-INT to recipients by January 31
• Payers must file with the IRS by February 28 (paper filing) or March 31 (electronic filing)
• The $10 reporting threshold applies to each payer separately
• Foreign account reporting thresholds may apply if interest is from overseas accounts
Information Reported on Form 1099-INT
The form includes several key pieces of information:
• Box 1: Interest income
• Box 2: Early withdrawal penalties
• Box 3: Interest on U.S. Savings Bonds and Treasury obligations
• Box 4: Federal income tax withheld
• Box 5: Investment expenses
• Box 6: Foreign tax paid
• Box 7: Country or U.S. possession where foreign tax was paid
• Box 8: Tax-exempt interest
• Box 9: Specified private activity bond interest
How to Handle Form 1099-INT When Filing
Step 1: Gather All Forms
Collect all 1099-INT forms received for the tax year. Don't forget about joint accounts, which may be reported under either spouse's Social Security number.
Step 2: Verify Information
Check that your name, address, and Social Security number are correct on each form.
Step 3: Report on Your Tax Return
• Report interest on Schedule B if total interest exceeds $1,500
• Transfer the total to Form 1040
• Include tax-exempt interest separately where indicated
• Report any foreign tax paid for potential foreign tax credit
Step 4: Keep Records
Maintain copies of all 1099-INT forms with your tax records for at least three years.
Common Mistakes to Avoid
1. Failing to report interest under $10
Even if you don't receive a 1099-INT, you must report all taxable interest income.
2. Double-reporting joint account interest
Ensure interest from joint accounts isn't reported twice on married filing joint returns.
3. Misreporting tax-exempt interest
Don't include tax-exempt interest in your taxable income, but do report it on the appropriate line.
4. Overlooking foreign tax implications
Report foreign account interest and consider foreign tax credit opportunities.
Consequences of Incorrect Filing
For Recipients
• The IRS may send a notice if reported amounts don't match their records
• Potential penalties and interest on unpaid taxes
• Possible audit triggers if discrepancies are significant
• Civil penalties for substantial understatement of income
For Payers
• Penalties for late filing ($50-$280 per form, depending on timing)
• Additional penalties for intentional disregard ($570 per form)
• Possible criminal penalties for willful failure to file
When to Seek Professional Help
Consider consulting a tax professional if you:
• Have multiple sources of interest income
• Receive foreign interest payments
• Need to amend previously filed returns
• Receive IRS notices about interest income discrepancies
• Have questions about taxability of specific interest types
Remember that interest income reporting is highly automated, with the IRS receiving copies of all 1099-INT forms. This makes accurate reporting crucial to avoid notices and potential penalties.
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Frequently Asked Questions
What is the minimum amount of interest that triggers a 1099-INT form from a bank or financial institution?
Any entity that pays $10 or more in interest during the tax year is required to issue a Form 1099-INT to the recipient and file a copy with the IRS. This $10 threshold applies separately to each payer, meaning you could receive multiple 1099-INT forms if you earn interest from more than one source. However, even if you earn less than $10 from a single payer and do not receive a form, you are still legally required to report that interest income on your tax return.
By what date should a taxpayer expect to receive their Form 1099-INT in the mail?
Payers are required to send Form 1099-INT to recipients by January 31 of the year following the tax year in which the interest was paid. If you have not received your form by early February, you should contact the financial institution directly to request a copy. Keep in mind that payers have until February 28 for paper filing with the IRS, or March 31 if filing electronically.
Does tax-exempt interest need to be reported on a tax return even if it isn't taxable?
Yes, tax-exempt interest must still be reported on your tax return, just on a separate designated line rather than as taxable income. Tax-exempt interest is recorded in Box 8 of Form 1099-INT, and failing to report it in the correct place is listed as one of the most common filing mistakes. Including tax-exempt interest in your taxable income would result in overpaying taxes, so it is important to distinguish between the two types when completing your return.
When does a taxpayer need to use Schedule B to report interest income?
Schedule B is required when your total interest income from all sources exceeds $1,500 for the tax year. Once you complete Schedule B, the combined total is then transferred to Form 1040. Tax-exempt interest should also be reported separately in the appropriate section of your return, even if Schedule B is not otherwise required.
What penalties can a payer face for failing to file Form 1099-INT correctly or on time?
Payers who file Form 1099-INT late can face penalties ranging from $50 to $280 per form, with the exact amount depending on how late the filing is. If the IRS determines that a payer intentionally disregarded the filing requirement, the penalty increases significantly to $570 per form. In cases of willful failure to file, criminal penalties may also apply, making timely and accurate filing essential for any business or entity that pays interest.
About the Author
Tax Writer
Markos Banos is a tax professional at IRS.com with expertise in U.S. federal and state tax law. Their articles are written to help taxpayers understand complex tax topics in plain English.