What Is the Purpose of the 1099-INT Form?

Form 1099-INT is one of several tax forms.

Form 1099-INT helps you file your taxes on interest income received. This form is required if you have received interest income from any type of account or investment, such as a savings account or retirement account. Interest that you have paid on an account, such as mortgage interest, should not be reported on form 1099-INT. If you have paid interest to others, the Internal Revenue Service website has a copy of this form that you can print for reporting that interest, as well as instructions for filling out and filing the form.

Taxable Interest Income

Use form 1099-INT to report interest income from savings accounts.

The IRS website's Tax Topic number 403 says, "Most interest received that can be withdrawn, is taxable income. Examples of taxable interest are interest on bank accounts, money market accuracy certificates, and deposited insurance dividends. ... Certain distributions commonly referred to as dividends are actually interest. They include 'dividends' on deposits or share accounts in cooperative banks, credit unions, domestic savings and loan associations, federal savings and loan associations, and mutual savings banks."

This means that the most common types of interest income are the ones you report using form 1099-INT.

What 1099-INT Doesn't Include

Make sure you are putting the right types of interest on the right forms.

Interest received from insurance dividends left on file with the Department of Veterans Affairs is not taxable. Interest from Series EE and Series I U.S. Savings Bonds does not have to be reported until it is redeemed or the fund has matured. If you received a discount on a bond or note, the original discount may have to be counted as interest, but it would be reported on a different form. Interest paid should also be reported on a different form. If you received mortgage interest from someone, that should be reported on another form as well.

Where to Get Form 1099-INT

You should receive a copy of form 1099-INT in the mail if you had interest.

If you are an individual, you will receive a copy of form 1099-INT from the payer of any interest income you have received, such as your bank. If you paid interest income to someone else, you will need to report the interest income to the person and the IRS. You can obtain a copy of the form from the IRS website. The red copy is for your records. There are two black and white copies, one for the person who received interest income and one for the IRS. Do not send the red copy to the IRS, as it cannot be scanned into the agency's computer and will result in you being charged a $50 fee.

Filing Information

Form 1099-INT has information for both state and federal taxes.

Once you receive a copy of form 1099-INT from the source of your interest income, you will need to put the information from that form into your federal and state tax returns. For federal returns, the information will need to be put into either Form 1040 Schedule B or Form 1040A Schedule 1. The necessary forms and filing procedures vary from state to state, so check with your state tax commission or tax preparer to see which forms to fill out.

Other Information

The IRS website has a section of information dedicated to form 1099-INT.

Most individuals will never have to fill out form 1099-INT but may receive it from sources of interest income. You must report all interest income to the IRS. If you neglect to report any income information, you risk being audited and possibly being charged penalties and fees. The IRS website and your state tax commission's website may be able to answer any other questions you may have.

References

• Internal Revenue Service: Form 1099-INT
• Internal Revenue Service FAQ: Form 1099-INT Interest Income
• Internal Revenue Service: Tax Topic Number 403
• Internal Revenue Service: Instructions for Form 1099-INT and 1099-OID
• State of California Franchise Tax Board: Form 1099-G and 1099-INT Frequently Asked Questions

Resources

• Internal Revenue Service: Frequently Asked Questions