What Form 1099-INT (2022) Is For
IRS Form 1099-INT (2022) is a tax form used to report interest income earned during the tax year from banks, credit unions, mutual funds, or other financial institutions. It provides detailed information about interest payments, taxable interest, tax-exempt interest, and foreign tax paid. The form helps ensure that all interest income is accurately reported on the taxpayer’s federal income tax return.
This form applies to anyone who receives interest income from savings accounts, certificates of deposit, treasury bonds, savings bonds, or other investments. Each payer must file Form 1099-INT with the IRS and send a copy to the taxpayer by postal mail or electronically. The taxpayer must include this information on their tax return and pay income tax on any taxable interest income received.
When You’d Use Form 1099-INT
A taxpayer uses Form 1099-INT when filing a federal income tax return that includes interest income received from financial institutions or mutual funds. The form is issued when at least $10 in interest payments have been made, but all interest earned must be reported, even if no form is received. Reporting all interest ensures that the taxpayer’s records match what has been reported to the IRS.
Form 1099-INT is also required when a taxpayer files an amended return to correct previously unreported interest income, foreign tax paid, or income from multiple accounts. If a corrected form is received, the taxpayer must file Form 1040-X to update any changes to taxable or tax-exempt interest. Reporting accurately helps prevent IRS notices or penalties for underreporting income.
For complete details on reporting, withholdings, and tax filings, see our guide for Information Returns & Reporting Forms.
Key Rules or Details for 2022
For the 2022 tax year, financial institutions must issue Form 1099-INT if they paid at least $10 in taxable interest, tax-exempt interest, or interest on U.S. Treasury obligations. Taxpayers who earned more than $1,500 in taxable interest income must complete Schedule B and attach it to their tax return. Backup withholding of 24 percent may apply if a taxpayer fails to provide the correct taxpayer identification number or underreports income.
Tax-exempt interest from municipal bonds, private activity bonds, or exempt interest dividends must still be reported, even if it is not subject to federal income tax. Foreign tax paid on interest earned in a foreign country may qualify for a tax credit or deduction. Additional details, such as bond premium, market discount, or original issue discount, may also appear on the form when applicable.
Step-by-Step (High Level)
Step 1: Gather Forms 1099-INT and documentation
Collect all Forms 1099-INT from banks, mutual funds, and financial institutions. Confirm the correct tax year, account number, and recipient information. Review amounts for taxable interest income, tax-exempt interest, foreign tax, and early withdrawal penalties.
Step 2: Reconcile interest with personal records
Compare the total interest income on each form with bank and investment statements. Ensure all interest received, including from multiple accounts, matches your records before completing the federal income tax return.
Step 3: Determine taxable and tax-exempt interest
Identify which interest income is taxable and which is tax-exempt. Taxable interest includes payments from savings bonds and treasury obligations, while tax-exempt interest may come from municipal bonds or exempt interest dividends.
Step 4: Review filing thresholds and requirements
Check if taxable interest income exceeds $1,500, which requires Schedule B. Review backup withholding or foreign tax amounts and confirm if FATCA filing applies for interest earned in a foreign country.
Step 5: Report on the federal income tax return
Enter taxable interest on Form 1040, Line 2b, and tax-exempt interest on Line 2a. Include any bond premium, market discount, or foreign tax credits as shown on Form 1099-INT.
Step 6: Apply credits, deductions, and withholding
Claim credits or deductions for foreign tax paid and deduct early withdrawal penalties on Schedule 1. Apply backup withholding amounts to reduce the total federal income tax owed.
Step 7: File and retain records
File the tax return electronically or by mail and ensure all Form 1099-INT details are included. Keep copies and records for at least three years for IRS verification if needed.
Common Mistakes and How to Avoid Them
Taxpayers often make costly but straightforward mistakes when reporting interest income. Common errors include:
- Not reporting small amounts: All interest income is taxable unless specifically exempt. Even amounts under $10 must be included on your tax return.
- Overlooking closed or merged accounts: Interest from accounts closed or merged during the year is still considered taxable income and should be reported.
- Mixing taxable and tax-exempt interest: Report tax-exempt interest separately on Line 2a. Do not combine it with taxable interest on Line 2b.
- Forgetting to file Schedule B: If total taxable interest exceeds $1,500, you must attach Schedule B to your Form 1040 to avoid IRS notices.
- Ignoring corrected forms: If a financial institution issues a corrected Form 1099-INT, review the changes and file Form 1040-X if necessary.
- Missing early-withdrawal penalties: The amount in Box 2 of Form 1099-INT represents an early-withdrawal penalty. Deduct it on Schedule 1, Line 18.
Carefully reviewing all forms and adhering to IRS reporting rules helps ensure accuracy and prevent unnecessary delays or penalties.
What Happens After You File
After filing a federal income tax return that includes Form 1099-INT, the IRS matches the interest income reported with data received from financial institutions. Any discrepancies may result in a CP2000 notice or additional taxes owed. Accurate reporting ensures proper credit for withholding, prevents penalties, and helps maintain compliance with federal income tax requirements.
FAQs
What is IRS Form 1099-INT (2022) used for?
IRS Form 1099-INT (2022) is used to report interest income earned from savings accounts, treasury bonds, or mutual funds. Financial institutions send this tax form to both the IRS and the taxpayer to ensure accurate reporting on the federal income tax return.
Is tax-exempt interest reported on Form 1099-INT?
Yes, tax-exempt interest from municipal bonds, private activity bonds, or exempt interest dividends must still be reported on Form 1099-INT. Although this income is not subject to federal income tax, it must be included for informational purposes.
What should a taxpayer do if they receive multiple Forms 1099-INT?
A taxpayer should combine the interest income reported on all Forms 1099-INT and include the total amount on the federal income tax return. Each financial institution reports interest paid separately, so all forms must be reviewed carefully to ensure accuracy.
How are early withdrawal penalties shown on Form 1099-INT?
Early withdrawal penalties from savings accounts or certificates of deposit are reported in Box 2 of Form 1099-INT. This amount is deductible on Schedule 1, reducing taxable income and helping the taxpayer pay income tax only on the net amount earned.
Does foreign tax appear on Form 1099-INT?
Yes, foreign tax paid on interest income earned from a foreign country is reported in Box 6 of Form 1099-INT. Taxpayers may claim a credit or deduction for this foreign tax when they file their federal income tax return.
For more resources on filing or understanding prior-year IRS forms, visit our Form Summaries and Guides Library or see our IRS assistance guide.
