How to Report Interest Earned on a Certificate of Deposit
Like all other forms of income, interest from a certificate of deposit, commonly called a CD, must also be reported to the government. You should receive a form 1099-INT from the financial institution that issued the CD. Form 1099-INT will tell you the amount of interest you received during the year and should be kept in your tax records for at least five years. You will need to use this form to report the income you received from a CD.
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Instructions
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Gather the necessary information. You will need a form 1099-INT from the financial institution that issued the CD. If you don't have one, call the customer service department of your financial institution to request a copy. Even if you don't receive this form, you are still responsible for reporting the amount of interest received as income. If the amount on the form is incorrect, ask for a new one, which should be marked "Corrected." For an example of a 1099-INT form, see the Resources section.
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Calculate the interest on your CD to verify the 1099-INT using a calculator. Bankrate.com has a CD calculator that is available for this. You will need to know the amount of your initial investment, the dollar value invested in the CD, the maturity duration, and the annual percentage yield, or APY. See the Resources section for a link to the calculator.
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Download the 1040 Schedule A&B from the IRS website. See Resources for a link. Take the amount of Interest Income in Box 1 of the 1099-INT. Input this amount into line 1 of Schedule B, Part 1. You will also need to list the name of the issuing financial institution as the payor.
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If you have more than one CD from multiple payors, list them all in Part 1. Add all lines in Part 1 for "line 2." This is the total amount of interest paid which should include all interest paid to you from CDs. You do not need to attach Form 1099-INT to Schedule B. The payor has submitted the form to the IRS.
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