Form 1099-INT: Interest Income (2025) – Your Complete Guide

Understanding tax forms doesn't have to be complicated. This guide breaks down everything you need to know about Form 1099-INT, the document that reports interest income you've earned throughout the year.

What Form 1099-INT Is For

Form 1099-INT is an information return that financial institutions and other payers use to report interest income paid to you during the tax year. Think of it as a receipt showing how much interest you earned from banks, credit unions, bonds, and other investments. (Source: IRS.gov)

You’ll receive a Form 1099-INT if someone paid you:

• $10 or more in interest from bank accounts, money market accounts, certificates of deposit, corporate bonds, or U.S. Treasury obligations
• $600 or more in interest paid in the course of a trade or business (such as interest on delayed death benefits or interest received with damages)
• Any amount where foreign tax was withheld on your interest
• Any amount where federal income tax was withheld under backup withholding rules

The form includes various boxes reporting different types of interest income, including taxable interest (Box 1), interest on U.S. Savings Bonds and Treasury obligations (Box 3), tax-exempt interest (Box 8), and early withdrawal penalties (Box 2). (Source: IRS.gov)

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

Most taxpayers receive their Form 1099-INT by early February and use it when filing their annual tax return. However, there are situations where you might need to deal with late or corrected forms.

Receiving Forms Late

Financial institutions must send you your Form 1099-INT by February 2, 2026 (for tax year 2025).
If you haven’t received your form by mid-February, contact the financial institution directly.
Don’t wait for the form if you know you earned interest — you’re still required to report all taxable interest income on your tax return, even without the form. (Source: IRS.gov)

Amended Returns

If you receive a corrected Form 1099-INT after you’ve already filed your tax return, you may need to file an amended return using Form 1040-X if the correction changes your tax liability.
Look for a box marked “CORRECTED” at the top of the form. Common reasons for corrections include:

• Incorrect dollar amounts
• Wrong taxpayer identification numbers
• Errors in reported interest categories

What to Do

Compare the corrected form with your original. If the change affects your tax liability, file Form 1040-X within three years from the date you filed your original return, or within two years from the date you paid the tax, whichever is later.

Key Rules for 2025

Understanding the reporting thresholds and requirements helps you stay compliant.

Reporting Thresholds

You must report all taxable interest income on your federal tax return, regardless of the amount.
However, payers are only required to issue Form 1099-INT if they paid you:

• $10 or more in most types of interest
• $600 or more for certain business-related interest

(Source: IRS.gov)

Schedule B Requirement

If your total taxable interest income exceeds $1,500 for the year, you must complete Schedule B (Form 1040) and attach it to your tax return.
This schedule itemizes all your interest and dividend income sources. (Source: IRS.gov)

Tax-Exempt vs. Taxable Interest

Not all interest reported on Form 1099-INT is taxable.

• Box 8 shows tax-exempt interest from municipal bonds and other qualifying obligations.
• While this interest is exempt from federal income tax, you must still report it on your tax return.
• Tax-exempt interest may affect other calculations, such as determining whether your Social Security benefits are taxable. (Source: IRS.gov)

Electronic Filing Mandate (For Payers)

If you’re filing 10 or more information returns for the year, you must file electronically through the IRS Information Returns Intake System (IRIS) or other approved systems.
The IRS no longer accepts paper forms from large filers. (Source: IRS.gov)

Key 2025 Deadlines

• February 2, 2026: Payers must furnish copies to recipients
• March 2, 2026: Paper filing deadline with the IRS (if filing fewer than 10 forms)
• March 31, 2026: Electronic filing deadline with the IRS

Step-by-Step: How to Use Form 1099-INT (High Level)

For most taxpayers, using Form 1099-INT is straightforward.

Step 1: Gather Your Forms

Collect all Forms 1099-INT you receive from banks, credit unions, brokerages, and other financial institutions.
You might receive multiple forms if you have accounts at different institutions.

Step 2: Review for Accuracy

Verify that your name, address, and Social Security number are correct.
Check that the reported amounts match your records.
If you find errors, contact the issuer immediately to request a corrected form.

Step 3: Organize the Interest Types

Separate taxable interest (Boxes 1 and 3) from tax-exempt interest (Box 8).
Note any early withdrawal penalties (Box 2), as these are deductible from your income.

Step 4: Report on Your Tax Return

• Report taxable interest income on Schedule B if it exceeds $1,500
• Report directly on Form 1040, line 2b if it’s $1,500 or less
• Deduct early withdrawal penalties on Schedule 1 (Form 1040)

Step 5: Keep Records

Retain copies of all Forms 1099-INT with your tax records for at least three years.
The IRS receives copies of these forms and will match them against your return.

Step 6: Pay Any Required Estimated Taxes

If you’re receiving substantial interest income not subject to withholding, you may need to make quarterly estimated tax payments to avoid penalties. (Source: IRS.gov)

Common Mistakes and How to Avoid Them

Mistake #1: Forgetting to Report Small Amounts

Even if you didn’t receive a Form 1099-INT because your interest was less than $10, you’re still legally required to report it.

Mistake #2: Overlooking Tax-Exempt Interest

Tax-exempt interest (Box 8) must still be reported on your return for informational purposes.

Mistake #3: Mishandling Nominee Situations

If you receive Form 1099-INT for interest that actually belongs to someone else (e.g., a joint account), you’re a “nominee recipient.”
You must:

• Report the full amount on Schedule B
• Subtract the portion belonging to the other person
• Issue a Form 1099-INT to the actual owner

(Source: IRS.gov)

Mistake #4: Missing the Early Withdrawal Penalty Deduction

Box 2 shows penalties for early withdrawal — this amount is deductible from your gross income.

Mistake #5: Ignoring Foreign Tax Paid

If Box 6 shows foreign tax paid, you may qualify for a foreign tax credit or deduction.

Mistake #6: Failing to Update Address Information

Notify your financial institutions if you’ve moved.
A Form 1099-INT sent to an old address could delay your filing or cause missed forms.

What Happens After You File

IRS Matching Program

The IRS receives copies of all Forms 1099-INT and electronically matches them against your reported income.
Discrepancies trigger review notices such as CP2000.

If Everything Matches

Your return processes normally.
Interest income is added to your other income to determine your total tax liability.

If There’s a Discrepancy

You may receive a CP2000 Notice (Proposed Changes to Your Tax Return).
It explains the differences and proposes adjustments, additional tax, interest, or penalties.

Tax Impact

Interest income is taxed as ordinary income at your marginal tax rate.
There’s no preferential rate for interest income.

Backup Withholding Consequences

If Box 4 shows federal income tax withheld, it usually means you:

• Failed to provide your correct taxpayer ID
• Were flagged by the IRS for underreporting in prior years

The withheld amount is credited toward your total tax liability. (Source: IRS.gov)

FAQs

Q1: Do I need to report interest under $10?

Yes. All taxable interest must be reported on your tax return, regardless of amount.
The $10 threshold only determines whether the payer must issue you a form. (Source: IRS.gov)

Q2: What if I receive Form 1099-INT after I’ve already filed my tax return?

If it shows unreported interest, file Form 1040-X if it changes your tax liability.
If you already reported it, keep the form with your records.

Q3: Is interest from U.S. Savings Bonds taxable?

Generally yes. Interest from Series EE and Series I bonds is federally taxable but exempt from state/local taxes.
You may exclude it if used for qualified education expenses under the Educational Savings Bond Program. (Source: IRS.gov)

Q4: What’s the difference between Box 1 and Box 3 interest?

• Box 1: Taxable interest from banks, credit unions, etc.
• Box 3: Interest from U.S. Savings Bonds and Treasury obligations (federally taxable, state-exempt).
  (Source: IRS.gov)

Q5: Can I deduct the investment expenses shown in Box 5?

No. Investment expenses are no longer deductible for individuals.
Box 5 mainly applies to REMICs and is informational.

Q6: Do I pay Social Security and Medicare taxes on interest income?

No. Interest income is not subject to FICA taxes — only federal and possibly state income taxes.

Q7: What if my Form 1099-INT shows someone else’s information?

Contact the issuer for a corrected form.
If you’re the nominee recipient, report the full amount and issue a new Form 1099-INT to the true owner. (Source: IRS.gov)

Remember: Form 1099-INT is simple but accuracy matters. Keep records, verify forms, and report all interest income. For official guidance, visit IRS.gov/Form1099INT or consult a tax professional.

‍