Form 1099-INT 2019 Checklist
Purpose
Form 1099-INT reports taxable and tax-exempt interest income paid during 2019. For tax year 2019, payers must separately report bond premium amortization on covered securities, as per Regulations section 1.6045-1, and market discount accrued on a constant-yield basis for securities acquired on or after January 1, 2015, as per section 1276(b).
Step-by-Step Checklist
Step 1: Identify Covered vs. Noncovered Securities
Determine whether securities qualify as covered securities under the 2019 definition. Report premium amortization only for covered securities unless the recipient provided written notice declining amortization under Regulations section 1.6045-1. For non-covered securities, report only gross interest with no offset for premium amortization.
Step 2: Report Taxable Interest in Box 1
Include all taxable interest paid during the 2019 calendar year. This includes interest from savings and loan associations, mutual savings banks, credit unions, bank deposits, life insurance accumulated dividends, and indebtedness issued in registered form.
Include credits 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 credited on March 15, June 15, September 15, and December 15, 2019. For taxable covered securities acquired at a premium, you may report either a net amount of interest or gross amounts with separate premium reporting in Box 11.
Step 3: Report Early Withdrawal Penalty in Box 2
Report interest or principal forfeited due to early withdrawal from time savings accounts, such as certificates of deposit. The recipient may deduct this amount as an adjustment to gross income on Form 1040 for 2019. Do not reduce the amount reported in Box 1 by the forfeiture amount.
Step 4: Report U.S. Savings Bonds and Treasury Interest in Box 3
Report interest on U.S. Savings Bonds, Treasury bills, Treasury bonds, and Treasury notes separately from Box 1. This interest is exempt from state and local income taxes. Recipients should consult IRS Publication 550 to determine federal taxability. For U.S. Treasury covered securities acquired at a premium, you may report either a net amount or gross amounts with separate premium reporting in Box 12.
Step 5: Report Backup Withholding in Box 4
Report federal income tax withheld under backup withholding rules at the 24% rate for 2019 if the recipient failed to provide a taxpayer identification number or provided an incorrect TIN per Form W-9 instructions. Backup withholding applies to amounts required to be reported in Boxes 1, 3, and 8 of Form 1040.
Step 6: Report Bond Premium Amortization by Security Type
For taxable covered securities other than Treasury obligations acquired at a premium, report premium amortization in Box 11. For U.S. Treasury covered securities acquired at a premium, report in Box 12. For tax-exempt covered securities acquired at a premium, report in Box 13.
If the recipient notified you in writing that they did not elect to amortize bond premium under section 171, do not report any premium amortization for taxable covered securities. If you reported net interest amounts in Boxes 1, 3, 8, or 9, leave the corresponding premium boxes blank.
Step 7: Report Market Discount in Box 10
For covered securities acquired with a market discount, report the accrued market discount if the taxpayer notified you that a section 1278(b) election was made. For covered securities acquired on or after January 1, 2015, use the constant-yield method described in section 1276(b)(2) to determine accruals unless the taxpayer notified you in writing that they did not make a constant-yield election. For covered securities with original issue discount, report market discount accruals on Form 1099-OID rather than Form 1099-INT.
Step 8: Report Tax-Exempt Interest in Box 8
Enter tax-exempt interest of $10 or more credited or paid if the interest is used to finance government operations and is issued by a state, the District of Columbia, a U.S. possession, an Indian tribal government, or their political subdivisions. Include any accrued qualified stated interest on tax-exempt bonds sold between interest dates. Exempt-interest dividends from mutual funds or regulated investment companies are reported on Form 1099-DIV, not Form 1099-INT.
Step 9: Report Specified Private Activity Bond Interest in Box 9
Enter an interest rate of $10 or more on specified private activity bonds. Generally, specified private activity bonds refer to those defined in Section 141 and issued after August 7, 1986. This interest is subject to the alternative minimum tax. Include this amount in the total for Box 8 as well. Recipients must report this on Form 6251 for alternative minimum tax calculation.
Step 10: Report Foreign Tax in Box 6 and Foreign Country in Box 7
If foreign tax was paid on interest, report the amount in U.S. dollars in Box 6 and enter the name of the foreign country or U.S. possession in Box 7. Recipients may claim this as a credit or deduction on their Form 1040.
Step 11: Complete Box 14 for Tax-Exempt and Tax Credit Bonds
Provide the CUSIP number for tax-exempt bonds on which tax-exempt interest was paid, or tax credit bonds on which taxable interest was paid, or tax credit was allowed during 2019. Enter “various” if reporting aggregate interest for multiple bonds. Leave blank if no CUSIP was issued.
Step 12: Check FATCA Filing Requirement Box if Applicable
If you are reporting to satisfy Chapter 4 account reporting requirements under FATCA, check the FATCA filing requirement box. Recipients may also have a Form 8938 filing requirement. If this box is checked, an account number is required.
Step 13: Process Nominee Reporting if Applicable
If amounts belong to other persons, file a separate Form 1099-INT for each owner. List yourself as the payer and the other owner as the recipient. File all Copy A forms with Form 1096. Furnish Copy B to each owner by January 31, 2020. Spouses are not required to file nominee forms for amounts owned by the other spouse.
Step 14: File with IRS and Furnish to Recipients
File Copy A with the IRS by February 28, 2020, for paper filing or March 31, 2020, if filing electronically. Furnish Copy B to recipients by January 31, 2020. Do not submit printed copies from the IRS website for Copy A filing. Use scanning-compliant paper forms ordered from the IRS or file electronically with software meeting Publication 1220 specifications.
Step 15: Complete State Information Boxes if Required
Boxes 15, 16, and 17 may be used for state tax reporting if you participate in the Combined Federal/State Filing Program or are required to file with a state tax department. Enter the state abbreviation in Box 15, the payer’s state identification number in Box 16, and any state tax withheld in Box 17. These boxes are optional for IRS purposes.
Key 2019 Year-Specific Updates
Premium amortization for covered securities acquired at a premium must be reported separately on Boxes 11, 12, or 13 only if the recipient did not notify the payer in writing to decline amortization. Alternatively, payers may report net interest in Box 1 or 3 without requiring a separate premium line.
Market discount on covered securities acquired on or after January 1, 2015, must be calculated and reported using the constant-yield method in Box 10 unless the recipient provides a written election to use the straight-line method per Regulations section 1.6045-1. This constant-yield requirement does not apply to securities acquired before 2015.
Credit allowance dates for Build America bonds, qualified school construction bonds, qualified zone academy bonds, and qualified energy conservation bonds in 2019 are March 15, June 15, September 15, and December 15. Amounts are treated as interest income on those dates and reported in Box 1.
Box 9 specified private activity bond interest subject to alternative minimum tax continues to be included in the Box 8 total. Recipients must identify and report this subset separately on Form 6251 for alternative minimum tax calculation.
Recipient TIN masking applies for privacy protection. Payers report the complete TIN to the IRS on Copy A, but may display only the last four digits on Copy B furnished to recipients.
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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.
