Form 1099-INT (2015) Tax Year Checklist
Purpose and Scope
Form 1099-INT reports interest income, U.S. Savings Bond interest, tax-exempt interest, bond premium amortization, and foreign tax paid during the 2015 calendar year. The 2015 form introduced expanded reporting requirements for tax credit bond interest, requiring payers to include credit amounts from clean renewable energy bonds, new clean renewable energy bonds, qualified energy conservation bonds, qualified zone academy bonds, qualified school construction bonds, and Build America bonds in box 1 totals.
Recipient Identification and Form Distribution
Payers must verify that each recipient's identification number appears complete in internal records. The form may display only the last four digits of the Social Security number, Individual Taxpayer Identification Number, Adoption Taxpayer Identification Number, or Employer Identification Number on Copy B provided to recipients.
Full identification numbers must appear on Copy A filed with the Internal Revenue Service. Payers must furnish Copy B to recipients by February 1, 2016, and file Copy A with the IRS by February 29, 2016, for paper submissions or March 31, 2016, for electronic submissions using Publication 1220 specifications.
Interest Income Reporting Requirements
Box 1: Taxable Interest Income
Payees report all taxable interest income of ten dollars or more in box 1. Box 1 must include tax credit amounts from qualifying bonds that were treated as paid on the credit allowance dates of March 15, June 15, September 15, and December 15, 2015.
Recipients must reconcile these tax credit bond amounts on Form 8912 when filing their federal income tax returns. The credit allowance dates apply uniformly to all qualifying tax credit bonds held during the calendar year.
Box 2: Early Withdrawal Penalties
Box 2 shows interest or principal forfeited because of premature withdrawal from time deposits, such as certificates of deposit. Recipients may deduct this amount as an adjustment to income on Form 1040 without itemizing deductions.
Box 3: U.S. Government Obligations
Payers report interest on U.S. Savings Bonds, Treasury bills, Treasury bonds, and Treasury notes separately in box 3. This interest does not appear in box 1 because the reporting design keeps these categories separate.
Interest reported in box 3 remains exempt from state and local income taxes. This interest remains fully subject to federal income taxation and must be reported on the recipient's federal tax return.
Box 4: Federal Backup Withholding
Box 4 displays federal income tax backup withholding when recipients fail to furnish correct taxpayer identification numbers to payers. Recipients must include withheld amounts on their Form 1040 as tax payments already made on their behalf.
Box 5: Investment Expenses
Box 5 shows the recipient's proportionate share of investment expenses from single-class real estate mortgage investment conduits. This amount is included in the box 1 total. It may be deductible by recipients who itemize deductions on Schedule A of Form 1040 under the "Other expenses" line, subject to the two percent of adjusted gross income floor limitation.
Tax-Exempt Interest and Foreign Tax Reporting
Boxes 6 and 7: Foreign Tax Information
Box 6 reports foreign income tax paid on interest income during the calendar year, with all amounts converted to U.S. dollars for reporting purposes. Box 7 identifies the specific foreign country or U.S. possession to which the foreign tax was paid and reported in box 6.
Recipients may claim the foreign tax shown in box 6 as either an itemized deduction on Schedule A of Form 1040 or as a foreign tax credit using the appropriate tax credit form. The choice between claiming a deduction or a credit depends on the recipient's individual tax situation and which method provides a greater tax benefit.
Box 8: Tax-Exempt Interest
Payers report tax-exempt interest of ten dollars or more in box 8 when that interest finances government operations issued by states, the District of Columbia, U.S. possessions, Indian tribal governments, or their political subdivisions. Recipients report box 8 amounts on Form 1040 line 8b or Form 1040A line 8b, even though this interest remains exempt from federal income taxation.
Box 9: Alternative Minimum Tax Interest
Box 9 identifies the portion of tax-exempt interest from specified private activity bonds that may trigger alternative minimum tax liability. The amount shown in box 9 remains included within the box 8 total and must be considered when recipients complete Form 6251.
Covered Securities and Premium Amortization
Box 10: Market Discount
Payers report market discount accrual for covered securities in box 10 when recipients elected section 1278(b) treatment and provided proper notification to the payer. Market discount on tax-exempt securities generates taxable interest income that recipients must report on their federal returns.
Box 11: Bond Premium on Taxable Securities
Box 11 reports bond premium amortization for taxable covered securities during the tax year. Payers leave box 11 blank when recipients provided written notice declining to amortize bond premium under section 171 or when the payer reported net interest amounts in box 1 or box 3 that already reflect premium amortization offsets.
Box 13: Bond Premium on Tax-Exempt Securities
Box 13 shows bond premium amortization allocable to tax-exempt covered securities. When box 13 remains blank, the payer reported net tax-exempt interest in box 8 or box 9 that already accounts for premium amortization. Excess amortization over interest payments creates a nondeductible loss for the recipient.
Regulatory Updates and Special Provisions
The 2015 form added a chapter 4 FATCA account reporting checkbox that payers mark when satisfying Foreign Account Tax Compliance Act filing requirements. Recipients may face separate FATCA filing obligations under Form 8938 instructions when this box appears checked.
The covered securities versus noncovered securities distinction affects premium amortization reporting methods, with covered securities allowing either net or gross reporting while noncovered securities require gross-only reporting.
Nominee and Multiple Owner Situations
Nominees who receive Form 1099-INT containing amounts belonging to other persons must prepare separate Forms 1099-INT for each additional owner showing their allocable income portions. Spouses may report jointly without filing nominee returns for amounts owned by the other spouse.
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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.
