What is Form 1099-OID?
You are issued a Form 1099-OID when you have purchased a bond or note for an amount that is less than face value. An OID (Original Issue Discount) is the excess of a bond or note's stated redemption price over its issue price. The stated redemption price is usually the face value of the bond or note (say $10,000). The issue price is generally the amount at which the bond or note was first sold by the issuer (say $9,500).
The profit you make on the purchase ($500 in our example) is the OID and is taxable interest income for you over the life of the bond. You must include a part of the OID as interest income each year you hold the bond - even if you don't actually receive any interest until the bond matures. You'll be issued a Form 1099-OID to document your OID interest.
Entering Form 1099-OID into TurboTax
When you use TurboTax, we will ask you about an form 1099's you have received, including form 1099-OID. We then will enter the information on the correct schedule and perform all the calculations for you.
If you've already gone through the step-by-step interview and want to jump directly to the entry screen for this topic, follow these directions.
- Select the Federal Taxes tab (the Personal tab in the Home & Business edition).
- Select the Wages & Income subtab.
- Scroll down the Wages & Income screen until you see the Interest and Dividends group.
- Click on the Start/Update button to the right of the 1099-OID, Foreign Accounts category.
- Follow the prompts.
What if I received two or more 1099-OIDs?
After you have entered in your first 1099-OID, you will be given the option to add more. Simply click on the Add Another Payer button, and we'll walk you through step-by-step adding all your 1099-OIDs.
If you have yet to receive your 1099-OID, please click here to explore your options.
Additional Questions
If you need to correct or change any information you have entered from your 1099-OID, the steps you take depends on if you have already filed your tax return.
- If you have yet to file your return, simply follow the navigation instructions above, and correct or change your information.
- If you have already filed your return, you will need to amend your return. Please click here for instructions.
For questions about printing, please click here.
If you have questions about the availability of form 1099-OID, please click here.
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