Form 1099-INT is one of several "information returns" created by the IRS. Its purpose is to report to taxpayers and to the IRS the amount of interest earned during the tax year. However, not all interest income is reported on 1099-INT, so be careful to keep accurate records of your interest earned during the year so that you can properly complete your income tax return.
General 1099-INT Requirements
Most U.S. banks, financial institutions, and other payers of interest are required to provide taxpayers and the IRS with a 1099-INT any time the taxpayer earns $10 or more in interest during the year. If you do not receive a 1099-INT, but believe you should have, it is best to contact the payer for a replacement copy. Note that many institutional payers of interest provide 1099-INT forms solely in electronic form for those taxpayers who have opted out of paper statements.
If you have a joint interest in an interest-earning activity -- such as a joint savings account -- the financial company will send a 1099-INT only to the first name on the account and will report the interest earned only under that person's Social Security or tax identification number. This is the case even if the account is held in trust for someone else and all of the interest income is actually theirs. Interest reported to one person but belonging to another is referred to as nominee interest.
Unless the two account holders are married and filing jointly, the nominee recipient must report the interest income to the actual owner and to the IRS on a second 1099-INT form. This may be necessary even if the amount of interest at issue is under the normal $10 limit.
Not all interest over $10 is reported on a 1099-INT form; there are a number of exceptions to the general rule. One is for pass-through entities, such as partnerships, trusts and estates. These entities report the taxpayer's share of interest earned on a 10-K form, rather than a 1099-INT. (Note that interest reported on a 10-K has not necessarily been distributed to the taxpayer, but it is taxable nonetheless.) Another reason you might not receive a 1099-INT is if the payer is not within the jurisdiction of the United States -- for example, if you have a savings account in a foreign bank.
Report All Interest Income
Even if your interest income is not reported to you on a 1099-INT, you are still required by law to report the income on your tax return. The mere fact that the interest does not appear on a 1099-INT does not render it tax-exempt.
- IRS.gov; Publication 17 -- Tax Guide 2010; 2010
- IRS.gov; Form 1099-INT -- Interest Income; 2011
- IRS.gov; Instructions for Forms 1099-INT and 1099-OID; 2011
- Internal Revenue Service. "Instructions for Forms 1099-INT and 1099-OID (2020)." Accessed Jan. 14, 2020.
- Internal Revenue Service. "General Instructions for Certain Information Returns," Page 15. Accessed Jan. 14, 2020.
- Internal Revenue Service. "Form 1099-INT," Pages 1–3. Accessed Jan. 14, 2020.
- Internal Revenue Service. "Form 1099-INT." Accessed Jan. 29, 2020.
- Internal Revenue Service. "2019 Instructions for Schedule B (Form 1040) (2019)." Accessed Jan. 14, 2020.
Patricia DeWitt is a CTEC-registered tax professional, a member of the California State Bar and a graduate of Harvard Law School, J.D. class of 2000. Her writing appears on a range of business and finance websites.