TurboTax / Tax Calculators & Tips / All Tax Guides / IRS Tax Forms / Filing Tax Form 1099-INT: Interest Income

Filing Tax Form 1099-INT: Interest Income

Updated for Tax Year 2015


If you receive a 1099-INT, the tax form that reports most payments of interest income, you may not have to pay income tax on the interest it reports. However, you may still need to report it on your return.

The Internal Revenue Service requires most payments of interest income to be reported on tax form 1099-INT by the person or entity that makes the payments. This is most commonly a bank, other financial institution or government agency. If you receive a 1099-INT, you may not have to pay income tax on the interest it reports, but you may still need to report it on your return.

filing interest income tax form 1099int

1099-INT filing requirements

When you file your taxes, you don’t need to attach copies of the 1099-INT forms you receive, but you do need to report the information from the forms on your tax return. That’s because each bank, financial institution or other entity that pays you at least $10 of interest during the year must prepare a 1099-INT, send you a copy by January 31 and file it with the IRS. The IRS uses the information on the 1099-INT to ensure you report the correct amount of interest income on your tax return.

Taxation of interest

When you receive a 1099-INT, you’ll need to understand what each box of the form is reporting, so that you can report your interest on the appropriate lines of your tax return:

  • Box 1 of the 1099-INT reports all taxable interest you receive, such as your earnings from a savings account.
  • Box 2 reports interest penalties you’re charged for withdrawing money from an account before the maturity date.
  • Box 3 reports interest earned on U.S. savings bonds or Treasury notes, bills or bonds. However, some of this may be tax-exempt.
  • Box 4 reports any federal tax withheld on your interest income by the payer.
  • Box 8 relates to interest-bearing investments you hold with state and local governments, such as municipal bonds.

Reporting 1099-INT information

All amounts reported in box 1 must be reported on the “taxable interest” line of your tax return and are taxed in the same way as the other income you report on the return. For the penalty amounts reported in box 2, you may be able to take a deduction in the “adjusted gross income” section of your return. And although the tax-exempt interest reported in box 8 of the 1099-INT isn’t taxable, you still must report it on the “tax-exempt interest” line of your tax return for informational purposes.

It is also important to report all federal tax withheld from box 4 in the “payments” section of your return. Doing so will either reduce the amount of tax you’ll need to pay with your return or will increase your refund.

When you use TurboTax to prepare your taxes, you’ll just need to answer some simple questions about your income and 1099-INT forms. We’ll fill in all the right tax forms for you.

Schedule B implications

You must prepare a Schedule B with the name of each payer and the amount of interest received when the combined total of taxable interest reported on all 1099-INTs exceeds $1,500.

If box 3 of your 1099-INT includes interest from U.S. savings bonds that were issued after 1989, you may be eligible to exclude those amounts from tax if you use the proceeds to pay qualified higher education expenses. In order to do so, you’ll need to report the excludable amount on Schedule B and prepare Form 8815. If you receive interest income as a nominee (i.e., you receive interest that actually belongs to someone else), you must still report the income on Schedule B, but you then subtract it out as a “Nominee Distribution.” In this case, you will also need to report the interest belonging to the other party on a Form 1099-INT issued to them and reported to the IRS.

Get every deduction you deserve

TurboTax Deluxe searches more than 350 tax deductions and credits so you get your maximum refund, guaranteed.

For only $54.99$34.99*
Start for Free

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

Security is built into everything we do
Here's how
* Important Offer Details and Disclosures
  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Free 1040EZ/A + Free State offer only available with TurboTax Federal Free Edition; Offer may change or end at any time without notice. Actual prices are determined at the time of print or efile and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected 3/18/16. Special discount offers may not be valid for mobile in-app purchases.
  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal efile of up to 5 federal tax returns. Additional fees apply for efiling state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected 3/18/16. Prices subject to change without notice.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with efile and direct deposit; tax refund timeframes will vary.
  • Pay for TurboTax out of your federal refund: A $34.99 Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice service is available via phone for your toughest tax questions; fees may apply. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2014 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • Benefit Assist: After you file, TurboTax automatically shows you a full list of government benefits you may qualify for, like Food Stamps or reduced phone & utilities. Plus, we help you apply, saving you time and making it easier than ever to get more money! Estimate based on calculation of Benefit Assist users from tax year 2013 and published reports of average benefit and savings amounts from federal and state programs. Benefit Assist users who received one or more federal or state benefits received on average $576 (based on survey March-June 2015). Actual amounts and qualifications based on your individual situation; some individuals will not qualify. Feature may not be available for all customers.