Form 1099-INT (2012) Checklist
Purpose and Filing Deadlines
Form 1099-INT reports taxable and tax-exempt interest income paid during calendar year 2012.
Payers must furnish Copy B to recipients by January 31, 2013, which marks the deadline for providing payee statements. Copy A must be filed with the IRS by February 28, 2013, for paper submissions or April 1, 2013, for electronic filing.
These deadlines apply to all financial institutions and entities that paid reportable interest during the tax year, including banks, savings and loan associations, credit unions, and other organizations that make interest payments in the course of their trade or business.
Recipient Identification Requirements
Payers must verify that the recipient identification number matches IRS records. The TIN may include a Social Security Number, Individual Taxpayer Identification Number, or Adoption Taxpayer Identification Number.
Payers may truncate the recipient's TIN on paper payee statements to show only the last four digits, but they may also show the full TIN. Copy A filed with the IRS must always contain the complete nine-digit identification number.
Taxable Interest Reporting in Box 1
Report all taxable interest paid during calendar year 2012 in Box 1 when amounts reach at least ten dollars. This includes interest from bank deposits, bonds, debentures, notes, certificates, and other debt instruments.
Tax credit bond credits must also be reported in Box 1 as interest income. These credit amounts are treated as payments of qualified stated interest and represent taxable interest income to the holder. Recipients report this interest on their tax returns and claim the credit using Form 8912.
Tax Credit Bond Categories
Report credits from the following bond types on their respective credit allowance dates:
- Clean renewable energy bonds
- Gulf tax credit bonds
- Qualified forestry conservation bonds
- New clean renewable energy bonds
- Qualified energy conservation bonds
- Qualified zone academy bonds
- Midwestern tax credit bonds
- Qualified school construction bonds
- Build America bonds
Credit allowance dates occur quarterly on March 15, June 15, September 15, and December 15, 2012, plus the last day the bond remains outstanding.
Early Withdrawal Penalties in Box 2
Report interest or principal forfeited due to early withdrawal of time savings accounts in Box 2.
Recipients may deduct this penalty on Form 1040 as an adjustment to income, which reduces their taxable income without requiring itemization. Do not reduce the amount reported in Box 1 by any forfeiture amount shown in Box 2.
The full interest earned must appear in Box 1 regardless of penalties assessed, and the separate Box 2 reporting allows recipients to claim the appropriate deduction while maintaining accurate gross interest income figures for IRS processing and verification purposes.
U.S. Treasury Obligations in Box 3
Report interest on U.S. Savings Bonds, Treasury bills, Treasury notes, and Treasury bonds in Box 3. Do not include these amounts in Box 1, as separate reporting distinguishes federal obligations from other taxable interest sources.
This interest is generally exempt from state and local income taxes, though it remains subject to federal income taxation. Recipients use the Box 3 amount to properly exclude U.S. government interest from state tax returns while including it in federal taxable income calculations, ensuring compliance with both federal and state reporting requirements.
Backup Withholding in Box 4
Report federal income tax backup withheld in Box 4 when recipients fail to provide a correct TIN or when the IRS notifies the payer of underreported interest.
The backup withholding rate for 2012 is twenty-eight percent, applied to the gross interest payment before any deductions or adjustments.
Recipients include amounts shown in Box 4 as federal tax withheld when filing their income tax returns. Backup withholding ensures tax collection on interest income and continues until recipients provide proper identification or resolve underreporting issues with the IRS through appropriate certification procedures.
REMIC Investment Expenses in Box 5
Report the payer's share of REMIC single-class investment expenses in Box 5 only when these amounts are included in Box 1. This applies exclusively to single-class Real Estate Mortgage Investment Conduits.
Recipients may deduct these expenses on Schedule A as miscellaneous itemized deductions subject to the two-percent-of-adjusted-gross-income floor. The investment expenses represent the regular interest holder's proportionate share of deductible expenses paid by the REMIC.
Foreign Tax and Tax-Exempt Interest
Report foreign income tax paid on interest in Box 6, with the foreign country or U.S. possession identified in Box 7. Recipients may claim foreign taxes as either a deduction or a credit on Form 1040, depending on which method provides a greater tax benefit.
Report tax-exempt interest paid during 2012 in Box 8, excluding these amounts from Box 1 totals. Report specified private activity bond interest subject to alternative minimum tax in Box 9, which must also be included in the Box 8 total for complete disclosure of all tax-exempt interest received.
CUSIP Numbers and State Information
Enter the tax-exempt bond CUSIP number in Box 10 when the bond issuer assigned one. Enter "various" for aggregated reporting of multiple bonds, or leave Box 10 blank if no CUSIP number exists.
Complete Boxes 11 through 13 with state information when applicable, showing the two-letter state abbreviation, payer's state identification number, and state tax withheld. These state reporting boxes allow coordination between federal and state tax authorities, and payers must complete them whenever state income tax withholding applies to the recipient based on their state of residence or other state tax obligations.
Nominee Reporting Obligations
Payers must prepare separate Forms 1099-INT for amounts belonging to persons other than the named recipient. A husband or wife is not required to file a nominee return to show amounts owned by the other spouse.
File all nominee returns with the same deadlines that apply to standard reporting, using Form 1096 to transmit paper copies to the IRS. Nominee situations arise when one person receives interest on behalf of another, and proper reporting ensures that each actual owner receives documentation showing their share of interest income for accurate tax return preparation.
Form Preparation and Submission Standards
Assemble Copy A and Copy B according to IRS specifications for proper processing. The IRS uses optical character recognition equipment to process paper forms, which requires specific formatting that standard printers cannot replicate.
Order official forms from the IRS or file electronically rather than printing forms from the IRS website. Electronic filing through the Filing Information Returns Electronically system requires adherence to Publication 1220 specifications and provides an extended deadline of April 1, 2013.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
