Form 1099-INT Filing Checklist for Tax Year 2025
Purpose and Overview
Form 1099-INT reports interest income paid to recipients during the calendar year. This form is required when you pay $10 or more in interest (or $600 or more for interest paid in the course of your trade or business). The January 2024 revision clarifies premium amortization reporting for covered securities and specifies the treatment of market discount accrued on bonds using the constant yield method.
Payer Filing Requirements
Step 1: Verify Recipient Taxpayer Identification Numbers
Before filing, confirm that each recipient’s TIN matches IRS records using Form W-9. If a recipient fails to provide a TIN or provides an incorrect TIN, you must backup withhold at 24% and report the withheld amount in Box 4. Do not file Form 1099-INT without attempting to obtain a valid TIN through proper procedures.
Step 2: Determine Filing Threshold Requirements
File Form 1099-INT for each person to whom you paid amounts reportable in boxes 1, 3, or 8 of at least $10, or at least $600 of interest paid in the course of your trade or business. You must also file for any person for whom you withheld foreign tax on interest, or from whom you withheld any federal income tax under backup withholding rules, regardless of payment amount.
Step 3: Complete Payer Information Accurately
Enter complete payer identifying information, including name, TIN, street address, city, state, ZIP code, and telephone number. If filing paper forms, use only the official IRS printed versions of Copy A, as these forms are designed to be scannable with special red ink. Downloaded versions from the IRS website are not scannable and may result in processing delays or penalties.
Step 4: Report Taxable Interest Income in Box 1
Report all taxable interest income except U.S. Treasury and Savings Bond interest in Box 1. For taxable covered securities acquired at a premium, you may report either net interest after premium amortization offset or gross amounts for both interest and amortization in Box 11. The reporting method depends on whether the recipient made a written election under section 171 to amortize bond premium.
Step 5: Report Early Withdrawal Penalties in Box 2
Enter interest or principal forfeited due to early withdrawal from time deposits, such as certificates of deposit. Do not reduce the Box 1 amount by the forfeiture amount. Recipients may deduct this penalty when calculating their adjusted gross income on Schedule 1 of Form 1040.
Step 6: Report U.S. Government Interest Separately in Box 3
Report interest on U.S. Savings Bonds, Treasury bills, Treasury bonds, and Treasury notes in Box 3. This interest is exempt from state and local income taxes. Do not include these amounts in Box 1. For U.S. Treasury covered securities acquired at a premium, report amortization in Box 12 unless the recipient elected otherwise in writing.
Step 7: Report Federal Backup Withholding in Box 4
When a recipient does not furnish a TIN or provides an incorrect TIN, backup withhold at the rate of 24%. Report all backup withholding in Box 4. This 24% rate applies to payments required to be reported in boxes 1, 3, and 8 of Form 1040. The backup withholding rate is fixed by law and does not vary annually.
Step 8: Report Tax-Exempt Interest in Box 8
Report tax-exempt interest of $10 or more paid on obligations issued by a state, the District of Columbia, U.S. territories, or their political subdivisions. For tax-exempt covered securities acquired at a premium, report amortization in Box 13. If Box 13 exceeds interest paid, the excess represents a nondeductible loss under regulations.
Step 9: Report Market Discount for Covered Securities in Box 10
Report market discount in Box 10 only for covered securities when the recipient made a written election under section 1278(b) to include accrual in income. For securities acquired on or after January 1, 2015, calculate accrual using the constant yield method unless the recipient elected otherwise in writing.
Step 10: Report Specified Private Activity Bond Interest in Box 9
Report interest from specified private activity bonds subject to alternative minimum tax in Box 9. This amount duplicates a portion of Box 8 and must be included in the total tax-exempt interest. Recipients use this information when completing Form 6251 for alternative minimum tax calculations.
Step 11: Include CUSIP Numbers for Bonds in Box 14
Report CUSIP numbers for tax-exempt bonds and tax credit bonds in Box 14. If the interest or tax credit is reported in aggregate for multiple bonds or accounts, enter “various” in this box. If no CUSIP number was issued for the bond, leave Box 14 blank.
Step 12: Complete State Tax Information If Required
Include state tax information in boxes 15 through 17 only if you are required to withhold state tax or maintain state records for the recipient. Enter the state abbreviation in Box 15, the payer’s state identification number in Box 16, and any state income tax withheld in Box 17.
Step 13: Prepare Forms for IRS Submission
For paper filing, attach Copy A of all Forms 1099-INT to the Form 1096 transmittal. File with the appropriate IRS Submission Processing Center based on your location. Copy A must be the official IRS printed form with scannable red ink. Copies downloaded from the IRS website are not acceptable for submission to the IRS.
Step 14: Meet IRS Filing Deadlines
File paper forms with the IRS by March 2, 2026, for tax year 2025. If filing electronically, the deadline extends to March 31, 2026. Electronic filing is mandatory if you file 10 or more information returns of any type during the calendar year. The IRS Information Returns Intake System (IRIS) is the current electronic filing platform, as the FIRE system is scheduled for retirement at the end of filing season 2027.
Step 15: Furnish Recipient Copies by Deadline
Provide Copy B to each recipient by January 31, 2026, for tax year 2025. You may furnish statements electronically if recipients consent. Copies B, 1, and 2 can be printed from the IRS website downloads or completed using fillable PDFs available on the IRS website. Only Copy A requires official printed forms.
Recipient Reporting Considerations
Premium Amortization on Covered Securities
Recipients who hold covered securities acquired at a premium must reconcile premium amortization against interest income when preparing Schedule B. Failure to account for amortization results in overstated taxable income. Recipients are responsible for notifying payers in writing, as required by regulations, if they do not wish to amortize premiums on taxable bonds.
Market Discount Treatment
The market reported in Box 10 for covered securities acquired on or after January 1, 2015, is calculated using the constant yield method, unless the recipient made a written election for a different process. Recipients must report this accrual as interest income on Form 1040. The election to include the market discount in income must be made in writing and provided to the payer.
Tax-Exempt Interest Implications
Tax-exempt interest reported in Box 8 is included in modified adjusted gross income for certain tax calculations, including Medicare premium surcharges, net investment income tax, and other means-tested benefit determinations. Although exempt from federal income tax, this interest must be reported on Form 1040 and may affect various tax credits and deductions.
Foreign Tax Paid Credit or Deduction
Recipients may claim foreign tax paid shown in Box 6 either as a tax credit using Form 1116 or as an itemized deduction on Schedule A. The choice depends on individual circumstances and overall tax situation. Box 7 identifies the foreign country or U.S. territory where the tax was paid.
FATCA Filing Requirement Indicator
When the FATCA filing requirement checkbox is marked, it indicates the payer has satisfied Chapter 4 account reporting requirements. Recipients may have separate FATCA filing obligations under Form 8938 if their total foreign financial assets exceed the applicable threshold amount, depending on their filing status and residency.
Special Situations and Compliance Notes
Nominee Returns
If you receive Form 1099-INT for amounts belonging to another person, you are a nominee recipient. File Form 1099-INT with the IRS, showing yourself as the payer and the actual owner as the recipient. Furnish the same form to the actual owner. File these nominee returns with Form 1096 at the appropriate IRS Submission Processing Center for your location.
Extension Requests
Request automatic 30-day extensions using Form 8809 by the original due date. Extensions apply to IRS filing deadlines only, not recipient statement deadlines. Request extensions for recipient statements using Form 15397. No automatic extension is available for Form 1099-NEC, which has a January 31 filing deadline.
Electronic Filing Mandate
Filers with 10 or more information returns of any type are required to file electronically. This threshold applies to the aggregate total of all Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G filed during the calendar year. Electronic filing through the IRS Information Returns Intake System (IRIS) is free and accommodates up to 100 returns per upload session.
Penalties for Non-Compliance
Penalties for failure to file correct information returns range from $60 to $330 per form, depending on the extent of the late filing. Penalties also apply for failure to furnish correct recipient statements. Intentional disregard of filing requirements carries higher penalties of at least $630 per form, with no maximum limit.
Widely Held Fixed Investment Trusts
Trustees and middlemen of WHFITs must report gross interest attributable to trust interest holders on Form 1099-INT when amounts exceed $10. Tax information statements must be furnished to trust interest holders by March 15, 2026, including additional information beyond what appears on Form 1099-INT as specified in regulations.
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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.
