Form 1099-INT: Interest Income 2023 – Your Complete Guide

What the Form Is For

Form 1099-INT is an information return used to report interest income you received during the tax year. If you earned at least $10 in interest from savings accounts, certificates of deposit (CDs), bonds, or other interest-bearing accounts, the financial institution or organization that paid you will send you this form. Think of it as a receipt showing the IRS—and you—how much taxable interest income you earned.

The form captures various types of interest, from your everyday bank savings account to more complex investments like U.S. Treasury obligations and tax-exempt municipal bonds. You'll receive a copy (Copy B) from the payer by January 31 following the tax year, and the payer also sends a copy directly to the IRS. Even if you don't receive a Form 1099-INT, you're still required to report all interest income on your federal tax return. IRS.gov

When You’d Use It (Late/Amended)

You'll typically use Form 1099-INT information when preparing your annual tax return, which is usually due by April 15 of the year following the tax year. For 2023 returns, that means April 15, 2024.

If you receive a corrected Form 1099-INT after you've already filed your tax return—perhaps showing a different amount than originally reported—you may need to file an amended return using Form 1040-X. Similarly, if you discover you forgot to report interest income shown on a 1099-INT, you should file an amended return to correct the error. Generally, for a credit or refund, you must file Form 1040-X within three years after the date you filed your original return or within two years after the date you paid the tax, whichever is later. IRS.gov

If you didn't receive your Form 1099-INT by mid-February, contact the financial institution that should have issued it. They're required to provide you with a copy upon request. IRS.gov

Key Rules for 2023

Reporting Thresholds

Financial institutions and other payers must issue Form 1099-INT if they paid you at least $10 in interest during the year (boxes 1, 3, or 8). However, if the interest was paid in the course of a trade or business—like interest on a tax refund or certain delayed payments—the threshold rises to $600. The form must also be issued if any federal income tax was withheld under backup withholding rules, regardless of the amount.

Taxable vs. Tax-Exempt Interest

Not all interest reported on Form 1099-INT is taxable. Box 1 shows taxable interest that must be included in your gross income. Box 8 reports tax-exempt interest from municipal bonds and similar obligations, which doesn't increase your federal tax liability but must still be reported on your return for informational purposes.

You Must Report Everything

Even without a Form 1099-INT, you're legally required to report all interest income. The IRS receives copies of all 1099-INT forms, and their computers match these against what you report. Missing interest income can trigger correspondence or even an audit. IRS.gov

Step-by-Step (High Level)

Step 1: Gather Your Forms

Collect all Form 1099-INT documents you receive from banks, credit unions, brokerage firms, and other financial institutions. Keep them organized with your other tax documents. You should receive these by January 31.

Step 2: Review Each Form

Check that your name, address, and taxpayer identification number (usually your Social Security number) are correct. Look at Box 1 for taxable interest, Box 3 for U.S. Treasury interest, and Box 8 for tax-exempt interest. Note any amounts in Box 2 (early withdrawal penalties) and Box 4 (federal tax withheld).

Step 3: Add Up Your Interest

Total all amounts from Box 1 across all your Forms 1099-INT. Do the same for any other relevant boxes if applicable to your situation.

Step 4: Report on Your Tax Return

For most taxpayers, you'll report your total interest income on Schedule B (Form 1040) if your taxable interest exceeds $1,500, or directly on Form 1040, line 2b if it's $1,500 or less. Tax-exempt interest from Box 8 goes on Form 1040, line 2a, but doesn't add to your taxable income. IRS.gov

Step 5: Keep Your Records

Retain copies of all Forms 1099-INT with your tax records for at least three years after filing your return. IRS.gov

Common Mistakes and How to Avoid Them

Mistake #1: Not Reporting Small Amounts

Many taxpayers think interest under $10 doesn't need to be reported. Wrong. All interest income is taxable and must be reported, even if you don't receive a Form 1099-INT. Solution: Review your bank statements and report all interest earned, no matter how small. IRS.gov

Mistake #2: Reporting Tax-Exempt Interest as Taxable

Box 8 interest from municipal bonds is not taxable at the federal level, but it must still be reported. Some taxpayers mistakenly add this to their taxable income. Solution: Keep Box 1 (taxable) and Box 8 (tax-exempt) amounts separate when preparing your return.

Mistake #3: Forgetting About Early Withdrawal Penalties

If you withdrew money from a CD early, the penalty shown in Box 2 is deductible from your gross income. Many taxpayers miss this deduction. Solution: Report the full interest from Box 1, but also claim the Box 2 penalty as an adjustment to income on Schedule 1.

Mistake #4: Ignoring Nominee Interest

If you received a Form 1099-INT showing interest that actually belongs to someone else (perhaps from a joint account where you're listed first), you can't just ignore it—the IRS has a copy. Solution: Report the full amount on Schedule B, then subtract the other person's share with the label "Nominee Distribution," and issue them their own Form 1099-INT. See the Instructions for Schedule B for more details. IRS.gov

Mistake #5: Arithmetic Errors

Simple addition mistakes when totaling multiple Forms 1099-INT are surprisingly common. Solution: Double-check your math or use tax software that automatically imports and calculates totals from your forms. IRS.gov

What Happens After You File

After you file your tax return with Form 1099-INT information included, the IRS computer systems match the amounts you reported against the copies they received directly from financial institutions. This usually happens automatically within weeks or months of filing.

If everything matches, nothing happens—your return is processed normally, and you'll receive any refund you're due or your payment will be credited to your account. The matching process is seamless and requires no action from you.

However, if the IRS finds a discrepancy—perhaps you forgot to report interest from one account or made an arithmetic error—you'll typically receive a notice (often a CP2000) months later. This isn't technically an audit, but rather a proposed adjustment. You'll have an opportunity to respond, either agreeing with the correction or providing documentation to support your original filing. If you owe additional tax, the IRS will calculate the amount plus any applicable interest and penalties. The accuracy-related penalty is generally 20% of the portion of the underpayment attributable to negligence or disregard of rules or regulations. IRS.gov

For Payers/Financial Institutions

If you're a financial institution that filed Forms 1099-INT, the IRS reviews them for completeness and accuracy. Penalties for failing to file correct information returns vary based on when the correct information return is filed. The penalty applies separately to each information return you fail to file correctly. IRS.gov

FAQs

Q1: I didn't receive a Form 1099-INT, but I know I earned interest. What should I do?

Report the interest anyway. Review your bank statements to calculate your total interest for the year. You must report all taxable and tax-exempt interest on your federal income tax return, even if you don't receive a Form 1099-INT or Form 1099-OID. Financial institutions are only required to send Form 1099-INT if you earned at least $10 in interest. If you believe you should have received a form, contact your bank or financial institution and request it. IRS.gov

Q2: I received a 1099-INT with someone else's name and my name (joint account). How do I handle this?

If you're listed as the primary recipient but another person (other than your spouse, if filing jointly) owns part of the interest, you need to report the total amount on Schedule B, then subtract the portion belonging to the other person as a "Nominee Distribution." You should also prepare a Form 1099-INT for the actual owner unless that interest belongs to your spouse. See the Instructions for Schedule B for more details on reporting nominee distributions. IRS.gov

Q3: What's the difference between Box 1 and Box 8 interest?

Box 1 contains taxable interest that you must include in your adjusted gross income—this increases your tax liability. Box 8 contains tax-exempt interest from municipal bonds and similar obligations issued by a state, the District of Columbia, a U.S. territory, or their political subdivisions. This interest must be reported on your return (Form 1040, line 2a) for informational purposes but doesn't increase your federal tax liability. IRS.gov

Q4: I cashed in U.S. Savings Bonds this year. Where is that reported?

Interest from U.S. Savings Bonds, Treasury bills, Treasury notes, and Treasury bonds appears in Box 3 of Form 1099-INT. This interest is subject to federal income tax but is exempt from all state and local income taxes. If you're redeeming Series EE or I bonds issued after 1989 for qualified education expenses, you may be able to exclude some or all of the interest using Form 8815. IRS.gov

Q5: What is backup withholding (Box 4), and why was it taken from my interest?

Backup withholding occurs when you failed to provide a correct taxpayer identification number to your financial institution, or the IRS notified them that you underreported interest income. The payer must withhold federal income tax from your interest payments and send it to the IRS. This amount is credited toward your tax liability when you file your return, just like regular tax withholding from a paycheck. See the Instructions for Form 1099-INT for more information on backup withholding. IRS.gov

Q6: Can I deduct the interest I paid on my debts against the interest income I received?

No, interest income and interest expenses are reported separately. Interest you received is reported as income on your tax return. Interest you paid (like mortgage interest or student loan interest) may be deductible, but those deductions are claimed in different sections of your tax return and cannot be directly offset against interest income.

Q7: I received a corrected Form 1099-INT after filing my taxes. Do I need to file an amended return?

If the correction changes the amount of interest you reported and affects your tax liability, you should file Form 1040-X (Amended U.S. Individual Income Tax Return) to correct your original filing. You can now file Form 1040-X electronically with tax filing software to amend your Form 1040, 1040-SR, or 1040-NR. Include the corrected Form 1099-INT information in your amended return. File Form 1040-X only after you have filed your original return. IRS.gov

Sources

For more information and official forms, visit IRS.gov/Form1099INT

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