Form 1099-INT Interest Income 2015: Complete Guide

What Form 1099-INT Is For

Form 1099-INT is an information return that reports interest income you received during the calendar year. Think of it as a receipt from banks, credit unions, brokerage firms, and other financial institutions showing how much interest they paid you. If you earned at least $10 in interest from savings accounts, certificates of deposit (CDs), bonds, or similar investments, the institution that paid you is required to send you this form. The IRS also receives a copy, so they know what interest income you should be reporting on your tax return.

The form serves two main purposes: it informs you of your taxable interest income so you can accurately complete your tax return, and it helps the IRS verify that taxpayers are reporting all their interest income. Common sources of interest reported on Form 1099-INT include bank account interest, bond interest (both corporate and government), accumulated dividends from life insurance policies, and interest from certain investment trusts. IRS.gov

When You’d Use Form 1099-INT (Late/Amended)

Standard Deadlines for 2015

For the 2015 tax year, financial institutions were required to send Form 1099-INT to recipients by February 1, 2016, and file Copy A with the IRS by February 29, 2016 (paper filing) or March 31, 2016 (electronic filing). If you need to file your 2015 tax return late or didn't receive your Form 1099-INT on time, you should still report all interest income—even if you never received the form.

Corrected or Amended Returns

If you discover errors on your Form 1099-INT after filing your tax return, you should request a corrected form from the financial institution. They'll issue a new form with "CORRECTED" marked at the top. If the error affects your tax return, you'll need to file Form 1040X (Amended U.S. Individual Income Tax Return). Generally, you have three years from your original filing date to amend your return and claim a refund. The IRS prefers corrections within this three-year window to maintain accuracy in their records. IRS.gov

Key Rules or Details for 2015

Reporting Thresholds

Financial institutions must issue Form 1099-INT if they paid you at least $10 in interest during the year. For interest paid in the course of a trade or business (such as interest on delayed payments), the threshold is $600. Even if you don't receive a form, you're still legally required to report all interest income on your tax return.

Backup Withholding

If you failed to provide your correct taxpayer identification number (TIN) to your bank or financial institution, they may have withheld federal income tax at a rate of 28% on your interest payments. This withholding appears in Box 4 of your Form 1099-INT.

New for 2015: Box Renumbering

A significant change occurred—Box 13 was added to report bond premium on tax-exempt bonds. This caused all subsequent boxes to be renumbered, so if you're comparing 2015 forms to earlier years, the box numbers may have shifted.

Tax-Exempt vs. Taxable Interest

Not all interest is created equal. Interest from U.S. Savings Bonds and Treasury obligations (Box 3) is exempt from state and local taxes but taxable federally. Tax-exempt interest from municipal bonds (Box 8) may still affect certain tax calculations, and some private activity bond interest (Box 9) could trigger alternative minimum tax. IRS.gov

Step-by-Step (High Level)

Step 1: Receive the Form

By early February 2016, you should have received Form 1099-INT from each institution that paid you interest. Check that your name, address, and Social Security number are correct.

Step 2: Review Key Boxes

The most important box is Box 1, which shows your taxable interest income. Box 3 shows interest from U.S. Savings Bonds and Treasury obligations (also taxable but exempt from state/local taxes). Box 8 shows tax-exempt interest from municipal bonds. Box 4 shows any federal tax withheld.

Step 3: Report on Your Tax Return

When filing Form 1040 or 1040A, report the interest income on the appropriate line. If your total taxable interest exceeds $1,500, you must also complete Schedule B to provide detailed information. Tax-exempt interest goes on a separate line and, while not taxed, must still be reported.

Step 4: Don't Forget Missing Forms

If you believe you earned interest but didn't receive a Form 1099-INT, don't wait. Contact the financial institution to request a copy, and report the income regardless. The IRS receives copies of all Forms 1099-INT and will notice if your return doesn't match their records.

Step 5: Keep Your Records

Retain your Form 1099-INT with your tax records for at least three years in case of questions or audits. IRS.gov

Common Mistakes and How to Avoid Them

Mistake #1: Not Reporting Small Amounts

Even if you earned only $10 in interest, it's taxable income. Some taxpayers incorrectly assume small amounts don't need to be reported. The IRS computers are designed to match Forms 1099-INT to tax returns, and discrepancies trigger automated notices.

Mistake #2: Incorrect Taxpayer Identification Numbers

Transposed digits or outdated Social Security numbers are common. Always verify your TIN matches IRS records. Mismatches can trigger backup withholding and delays. Use the IRS TIN Matching program before filing to ensure accuracy.

Mistake #3: Overlooking Tax-Exempt Interest

While municipal bond interest isn't taxable, it must still be reported on your return. This information affects certain calculations, including Social Security benefit taxation and eligibility for certain credits. Failing to report it can cause problems.

Mistake #4: Not Accounting for Early Withdrawal Penalties

If you cashed in a CD early, Box 2 shows the penalty you paid. This is deductible, reducing your adjusted gross income—but only if you remember to claim it. This is an "above-the-line" deduction you shouldn't miss.

Mistake #5: Ignoring Corrected Forms

Brokerage firms sometimes issue corrected 1099-INT forms after the filing deadline. If you already filed, you must amend your return with Form 1040X. Ignoring corrections can lead to penalties and interest charges. IRS.gov

What Happens After You File

IRS Matching Process

The IRS uses sophisticated computer systems to match the Forms 1099-INT they received from financial institutions against the interest income reported on your tax return. This typically happens several months after you file. If there's a discrepancy—you reported less interest than shown on Forms 1099-INT—you'll receive a CP2000 notice proposing changes to your return, along with additional tax, penalties, and interest.

No News Is Good News

If your return matches IRS records, you likely won't hear anything. Your refund (if any) will be processed normally, or your payment will be recorded. The IRS typically has three years from your filing date to audit your return, though this can be extended in certain circumstances.

Corrected Returns

If you discover an error after filing, filing Form 1040X triggers a manual review process. Amended returns take longer to process—typically 8 to 12 weeks, sometimes longer. The IRS will send you a notice explaining any changes or requesting additional information.

State Returns

Don't forget that most states also require you to report interest income. Your Form 1099-INT Copy 2 is for your state tax return. State tax agencies also receive information returns and conduct their own matching programs, though generally with less automation than the federal system. IRS.gov

FAQs

Q1: What if I didn't receive a Form 1099-INT but I know I earned interest?

You're still required to report all interest income, even without the form. Contact your financial institution to request a copy. If they confirm they didn't issue one because you earned less than $10, you should still report the income on your tax return. Keep records of your account statements as documentation.

Q2: Can I throw away my Form 1099-INT after I file my taxes?

No. Keep it with your tax records for at least three years from the date you filed your return (or two years from the date you paid the tax, whichever is later). If you claimed a loss from worthless securities or bad debt deduction, keep records for seven years. You may need these documents if the IRS has questions about your return.

Q3: What's the difference between Box 1 and Box 8 interest?

Box 1 shows ordinary taxable interest (from bank accounts, corporate bonds, etc.) that's subject to federal, state, and local income taxes. Box 8 shows tax-exempt interest from municipal bonds, which isn't subject to federal income tax and usually exempt from state tax if you live in the issuing state. However, Box 8 interest still affects other tax calculations.

Q4: Do I need to file Schedule B if I only have one Form 1099-INT?

Only if your total taxable interest (from all sources) exceeds $1,500. If your interest income is $1,500 or less, you can simply report the total on Line 8a of Form 1040 or 1040A. If it exceeds $1,500, you must complete Schedule B listing each source of interest income.

Q5: What happens if my Form 1099-INT has the wrong Social Security number?

Contact the issuing institution immediately to request a corrected form. Filing with an incorrect SSN can cause major problems, including backup withholding on future interest payments. The institution must file a corrected Form 1099-INT with the IRS showing your correct information.

Q6: If I received a Form 1099-INT for a joint account, do both people report it?

Generally, the person whose Social Security number appears first on the account receives the Form 1099-INT and reports all the income. However, if you split the income between owners for tax purposes, the primary recipient should issue Forms 1099-INT to the other owners showing their share, filing these with Form 1096 at the IRS service center.

Q7: Will the IRS catch it if I don't report my Form 1099-INT?

Almost certainly. The IRS receives copies of all Forms 1099-INT and uses automated systems to match them against tax returns. Unreported interest typically triggers a CP2000 notice proposing additional tax, plus penalties and interest. It's always better to report all income accurately from the start. IRS.gov

For More Information

Visit IRS.gov/form1099int or call the IRS information reporting customer service line at 1-866-455-7438.

This guide is based on official IRS instructions and publications for the 2015 tax year. Tax laws change, so always consult current IRS guidance or a tax professional for your specific situation.

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