Form 1099-INT reports interest income you earned during the year

Form 1099-INT is the document a bank, credit union, brokerage, or other financial institution sends you when you earned $10 or more in interest during the calendar year. The form lists the total interest paid to you and goes to both you and the IRS, so the income is already in the tax system before you file.

You receive a 1099-INT for interest on savings accounts, money market accounts, certificates of deposit (CDs), bonds held outside retirement accounts, and some loan repayments. You do not receive one for interest earned inside a traditional IRA, Roth IRA, or 401(k) — those accounts shelter the interest from when ready tax reporting.

The threshold of $10 is a reporting requirement, not a tax threshold. If you earned $5 in interest, you still owe tax on it even without a 1099-INT. The form straightforward makes it easier for the IRS to match what you report against what the financial institution reported.

Key Takeaways

  • You receive a 1099-INT when a financial institution pays you $10 or more in interest during the year, and the form goes to the IRS at the same time.
  • Interest from savings accounts, money market accounts, CDs, and taxable bonds all generate a 1099-INT; interest inside retirement accounts does not.
  • The interest reported on 1099-INT is taxed as ordinary income at your regular tax rate, not at capital gains rates.
  • You report the total from your 1099-INT forms on Schedule B (if you have more than $1,500 in interest) or directly on Form 1040, depending on your total interest income.

Where 1099-INT interest appears on your tax return

All interest income reported on 1099-INT forms goes on your federal tax return as ordinary income. If your total interest income from all sources is $1,500 or less, you can report it directly on Form 1040 without filing Schedule B. If it exceeds $1,500, you must file Schedule B (Interest and Ordinary Dividends) and list each 1099-INT separately.

The interest is taxed at your ordinary income tax rate — the same rate as wages or self-employment income — not at the lower capital gains rate. This matters if you are in a higher tax bracket; even a small amount of interest can push you into the next bracket.

If you have multiple 1099-INT forms from different institutions, add them all together to determine whether you need Schedule B. You then report the total on your return.

Interest income that does not generate a 1099-INT

Interest earned inside a traditional IRA, Roth IRA, SEP-IRA, or 401(k) is not reported on a 1099-INT because the account itself is tax-deferred or tax-free. You do not report the interest until you withdraw money from the account (or never, in the case of a Roth IRA if you follow the rules).

Interest on U.S. Treasury bonds, notes, and bills is reported on a 1099-INT, but it is exempt from state and local income tax — only the federal portion applies. If you live in a state with income tax, you will still report the interest on your federal return but may be able to exclude it from your state return.

Interest paid to you by a family member or friend on a personal loan is not reported on a 1099-INT unless the loan was formally structured with a promissory note and the interest exceeded the IRS minimum interest rate for that year. Even then, the lender must file a Form 1098-F, not a 1099-INT.

When you receive your 1099-INT and what to do if it is wrong

Financial institutions must send you a 1099-INT by January 31 of the year following the interest payment. You should receive it by email, mail, or through your online account portal, depending on how the institution communicates with you.

If the amount on your 1099-INT does not match your records, contact the financial institution when ready. Ask them to issue a corrected form (a 1099-INT with a "CORRECTED" box checked) if the error is theirs. If you made an error in your records, you do not need a corrected form — you straightforward report the correct amount on your tax return and keep documentation of the correction.

If you do not receive a 1099-INT by early February and you know you earned $10 or more in interest, contact the institution and ask them to resend it or provide a duplicate. Do not wait until tax time to discover it is missing.

Interest income and estimated tax payments

If you earn a large amount of interest — particularly from CDs, bonds, or money market accounts — you may owe estimated tax payments during the year rather than waiting until April. The IRS requires estimated payments if you expect to owe $1,000 or more in federal tax for the year (or $500 if you are self-employed).

Interest income alone can trigger this requirement if you have a substantial amount in high-yield savings accounts or CDs. You make estimated payments quarterly using Form 1040-ES, and the payments are due in April, June, September, and January. Missing estimated payments can result in penalties and interest, even if you ultimately owe less tax than you paid.

If you are retired and living on interest and dividend income, working with a tax professional to calculate estimated payments can save you money and avoid underpayment penalties.

How interest income affects other tax situations

Interest income can affect your tax bracket and may push you into a higher one, increasing the tax rate on all your income. It can also affect whether you are required to file a return at all. For 2024, a single filer under age 65 must file if their gross income exceeds $14,600; interest counts toward that threshold.

If you receive Social Security, interest income can affect how much of your benefits are taxable. The IRS uses a formula called "combined income" that includes half your Social Security benefits plus all your other income, including interest. Earning even a small amount of interest can push you over the threshold where your benefits become partially taxable.

Interest income also affects whether you can claim certain credits, such as the Earned Income Tax Credit or education credits. It does not count as earned income for those purposes, but it can reduce your modified adjusted gross income (MAGI), which determines your may be able to access for some credits and deductions.

Frequently Asked Questions

Do I have to report interest income if I did not receive a 1099-INT?

Yes. The $10 threshold is only for when the financial institution must send you a form. You are required to report all interest income, regardless of amount, on your tax return. If you earned interest and did not receive a 1099-INT, you still owe tax on it.

What if I earned interest in a joint account — who reports it?

The financial institution will issue a 1099-INT to the Social Security number on file for the account. If both account holders are listed, the institution typically reports to one person. You and the co-owner should agree on who reports the interest, or split it proportionally if you each contributed equally. The IRS may follow up if the reported amount does not match what either of you reported.

Can I deduct interest I paid on a loan against interest I earned?

No. Interest you earned is income; interest you paid on a personal loan is not deductible. You report the full amount of interest earned on your return. The only exception is mortgage interest on a primary or secondary home, which may be deductible if you itemize deductions.

Does interest from a high-yield savings account get reported differently?

No. Interest from a high-yield savings account is reported on a 1099-INT just like interest from a regular savings account. The rate is higher, but the tax treatment is identical — it is ordinary income taxed at your regular rate.

What happens if the 1099-INT amount is more than I actually earned?

Contact the financial institution and ask for a corrected 1099-INT. Do not report the incorrect amount on your return. If you report the correct amount and the IRS notices the discrepancy, you will need to provide documentation showing the correction. It is easier to get the form corrected upfront.