Financial institutions play a key role every year in helping individuals and businesses meet their tax obligations. Among the most critical documents are 1099 forms, which are used to report certain types of income to the IRS and the state Revenue Department. Two of the most common forms are Form 1099-INT, which reports interest income from bank accounts, and Form 1099-DIV, which covers dividends and distributions from investments. These forms help ensure that all income earned outside of wages is included adequately on your federal and state tax returns, supporting accurate and timely payment of taxes each calendar year.
For banks and credit unions, issuing 1099-INT and 1099-DIV tax forms is not optional—the IRS requires them to provide this essential filing information to taxpayers and government agencies. This process ensures that anyone who earns enough in interest or dividends receives a form to help them file correctly. It also gives the IRS the data to verify income and track whether taxes have been properly withheld. Institutions must stay compliant because mistakes or missed deadlines can lead to IRS notices, additional paperwork, and financial penalties.
This article walks you through everything you need to know. We’ll explain the differences between 1099-INT and 1099-DIV, clarify which organizations and individuals qualify for exemptions, and outline key tax filing requirements with the FIRE system and the newer Information Returns Intake System (IRIS). You’ll also learn about the Transmitter Control Code (TCC), how to apply for your own TCC, essential filing deadlines, and how to avoid common errors that could delay your refund. Whether you’re a financial institution, a small business, a CPA, or an individual taxpayer, this guide will give you the knowledge and resources to stay compliant and confident during this tax year.
When you think about how banks and credit unions handle 1099-INT and 1099-DIV filings, it helps to start with the basics. These tax forms report income that isn’t tied to wages or salaries. Instead, they track interest and dividends that individuals, taxpayers, and business account holders receive during the tax year. These forms ensure that the IRS and the state Revenue Department have the correct filing information to match against your federal tax return and state tax return.
Form 1099-INT is the tax form banks, credit unions, and other financial institutions use to report interest income earned in a calendar year. If you are an individual taxpayer and your savings account or certificate of deposit (CD) earns at least $10 in interest, you will receive this form.
The IRS requires institutions to file a 1099-INT when those thresholds are met. A form is also needed if a business has paid $600 or more in interest to someone who is not a corporation. When you prepare your federal tax return, always include this filing information. Accurate reporting helps the IRS verify your income and correct your refund or payments.
Form 1099-DIV reports dividends and distributions paid to taxpayers from stocks, mutual funds, or credit union investments. If you receive more than $10 in dividends, your bank or financial institution must issue this tax form.
The form separates different types of dividends:
This information must be reported on your federal tax return and sometimes on your state tax return. If the details on the form don’t match IRS records, the agency may issue a notice to correct the discrepancy.
Both Form 1099-INT and Form 1099-DIV are essential for accurate tax filing. The IRS requires banks and credit unions to send these tax forms so it can compare reported interest and dividends with what you include on your federal tax return. The IRS may issue a notice or adjust your tax payments if the amounts don't match.
Many state revenue departments also need this filing information for income tax purposes. For instance, if your income from a savings account in New Mexico or another state exceeds the reporting threshold, you may need to file it with your state. Always verify names, TINs, and addresses to avoid errors and refund delays.
Form 1099-DIV is the IRS tax form that reports dividends and distributions you may receive from stocks, mutual funds, or credit union accounts. Your bank or financial institution must issue this form if these payments exceed $10 in a calendar year.
The 1099-DIV separates several types of dividends:
When you file your federal tax return or report taxes to the state Revenue Department, use the details on your 1099-DIV. You can find IRS official instructions on IRS.gov to help you complete the form correctly and avoid errors or notices.
Banks and credit unions are responsible for filing certain tax forms each tax year to report income earned by their customers. The IRS requires these institutions to provide accurate filing information so it can confirm what taxpayers report on their federal tax return and what appears on state tax returns through the Revenue Department.
You may need to file a 1099-INT or 1099-DIV if:
Correct recipient, address, and TIN details help taxpayers avoid IRS notices, extra payments, or delayed refunds.
Not every taxpayer or company must issue or receive a 1099-INT or 1099-DIV. The IRS requires banks, credit unions, and other financial institutions to provide these tax forms only when recipients meet specific eligibility criteria. Certain payees are considered “exempt recipients,” which means they do not need to be reported on information returns for a given tax year.
Here are common exempt recipients and special filing situations:
Most corporations do not need to receive 1099-INT or 1099-DIV forms.
Federal, state, and local entities are generally excluded from these reporting rules.
IRAs and other tax-advantaged accounts do not usually require separate paper forms for interest or dividends.
Sometimes, a third-party service or account holder may be the official recipient for filing information.
Note: Even when a payee is exempt, banks and credit unions should verify account details like TINs and addresses. This helps prevent errors, missed deadlines, or notices from the IRS or the Revenue Department.
Regarding 1099 reporting, banks and credit unions can choose between submitting paper forms or using electronic filing. The method you select depends on the number of tax returns you need to send in a given calendar year and the IRS requirements in place for the current tax year.
Here’s what to keep in mind:
Carefully review the requirements for your tax year and choose the method that fits your filing volume and reporting needs.
Filing tax returns is no longer just about sending paper forms through the mail. The IRS requires most banks, credit unions, and businesses to use electronic filing once they file at least ten information returns in a calendar year. This rule covers 1099-INT, 1099-DIV, 1099-NEC, W-2, and other tax forms for the current tax year. The change came after the Treasury lowered the threshold from 250 forms, making electronic filing the standard for nearly all filers.
The IRS sets precise requirements for e-filing. If your company or financial institution must file ten or more returns, you must submit them electronically. This applies whether you report interest on a savings account, dividends from investments, or wages on a W-2. Each filer must apply for its own TCC (Transmitter Control Code), which is used to transmit data securely to the IRS.
Two central systems handle e-file submissions. The FIRE system follows Publication 1220 formatting rules and is often used by larger filers. The IRIS system is a web-based option that allows individuals, banks, and credit unions to prepare, sign, and submit returns without outside software. Choosing the right system helps you meet all filing deadlines and avoid IRS notices.
There are clear advantages to filing tax forms online:
Switching to electronic filing supports compliance with both IRS and Revenue Department requirements. Using reliable tax preparation software or an online service also makes it easier for taxpayers and businesses to prepare, review, and submit accurate returns each tax year.
The movement from mailing paper forms to online e-filing reflects the IRS’s focus on streamlining taxation. The FIRE system has long managed bulk filing information, while the IRIS system now provides a free, user-friendly service for electronically filed returns.
Digital filing means simpler compliance and fewer delays for banks and credit unions. For taxpayers, it often results in faster refunds and fewer notices from the IRS. Staying current with these tools helps ensure every return is accurate, timely, and fully aligned with federal and state requirements.
Managing 1099-INT and 1099-DIV tax forms requires the right electronic systems. To comply with IRS requirements, banks, credit unions, and businesses must understand how the Transmitter Control Code (TCC) works, along with the FIRE and IRIS platforms. These tools ensure financial institutions can transmit accurate filing information for each tax year.
A Transmitter Control Code (TCC) is a five-digit number issued by the IRS. It identifies the company, bank, credit union, or service provider that will file information returns. Each filer must apply for their own TCC. Importantly, TCCs are system-specific—an IRIS-TCC differs from a FIRE-TCC and cannot be used interchangeably. Having the correct TCC helps the IRS and Revenue Department verify taxpayer data and ensures your returns meet federal requirements.
The Filing Information Returns Electronically (FIRE) system is the traditional platform for sending large batches of tax returns. To use it, institutions must:
This system is often used by larger companies and payroll providers handling thousands of 1099 or W-2 filings.
The Information Returns Intake System (IRIS) is a newer online option created for 1099 reporting. Unlike FIRE, it allows taxpayers and financial institutions to log in with an IRS account, enter filing information directly on the page, and submit returns without special tax preparation software.
Key advantages of IRIS include built-in validation, simplified process steps, and free access. While FIRE remains available, IRIS is designed to help banks and credit unions meet electronic filing and reporting deadlines with fewer technical barriers. Many individuals and smaller businesses may find IRIS easier for the current tax year.
Compliance with IRS and Revenue Department rules is essential to handling 1099 reporting. When banks, credit unions, or other business filers issue 1099-INT and 1099-DIV tax forms, the IRS requires accurate filing information matching taxpayers' federal and state tax return reports. The IRS may notify you if the amounts differ or if a TIN or Social Security number does not match. This can lead to extra tax payments, penalties, or delays in receiving a refund.
The deadlines for the 2024 tax year (filed in 2025) are essential to remember:
Tracking these dates helps you stay on top of compliance and avoid missed deadlines.
Some frequent mistakes that occur when filing 1099 tax forms include:
For example, a company that files late may owe $50 per form if corrected quickly, or $280 if corrected after August. Maximum fines can reach hundreds of thousands per calendar year, though small filers may qualify for reduced limits.
If you get an IRS notice, respond immediately and request penalty relief if you have reasonable cause. Always obtain copies of your PDF returns and related resources if further assistance or review is needed.
The rules around tax returns and 1099 forms can feel abstract until you see how they apply in real life. Below are a few practical examples showing how banks, credit unions, businesses, CPAs, and service providers handle reporting during a tax year. These scenarios highlight key requirements, common filing information challenges, and the role of the IRS and the Revenue Department in overseeing compliance.
A neighborhood credit union may manage fewer than ten deposit accounts that earned $10 or more in interest. In this case, it is required to issue Form 1099-INT to each recipient by January 31. Since the total number of returns is below the ten-form threshold, the institution can use paper forms and send them by mail. Even though e-filing is optional here, many choose tax preparation software to simplify the process and reduce errors.
A major bank often issues thousands of 1099-INT and 1099-DIV forms for income from savings and dividends. Because the IRS requires electronic filing when more than ten returns are due in a calendar year, these institutions must apply for their own TCC (Transmitter Control Code). They transmit large volumes of electronically filed returns using the FIRE or IRIS systems. Careful checks of each box, address, and TIN help avoid notices, delays, or incorrect refund calculations.
A CPA working with 25 business clients may prepare and submit many 1099s simultaneously. Since the combined volume exceeds the limit, the CPA must e-file and keep a valid TCC on file. The CPA may also need to request corrections if Social Security or TIN details are mismatched, which triggers an IRS review. Staying organized and keeping accurate PDF copies ensures smooth reporting and provides helpful resources for future audits. Clients often rely on their CPA’s guidance for assistance and timely compliance.
Understanding how banks and credit unions handle 1099-INT and 1099-DIV filings is essential for accurate tax filing each tax year. These tax forms provide the IRS and the Revenue Department with the filing information needed to match reported income on your federal and state income tax returns. If details do not align, you may get an IRS notice.
Here are everyday situations when you may encounter these forms:
By checking each box carefully and verifying TIN details, you can avoid errors and keep any potential refund on schedule.
Banks and credit unions must issue Form 1099-INT when an account earns at least $10 in interest and Form 1099-DIV for dividends or distributions of $10 or more. They provide this filing information to the IRS and the Revenue Department so that your federal and state tax returns reflect the same income. This process helps reduce errors and IRS notices.
Many companies, CPAs, and businesses rely on tax preparation software to create and submit accurate tax forms. Using e-file tools can save time, cut paper and mailing costs, and reduce errors. The IRS requires most filers with ten or more information returns in a calendar year to use electronic filing, so software helps you meet those requirements with less stress and more reliable results.
For the 2024 tax year, you must provide recipients with their 1099-INT or 1099-DIV by January 31, 2025. If you are using paper forms, they must be mailed by February 28, 2025. If you file electronically, the IRS deadline is March 31, 2025. Meeting each date helps ensure refunds are processed without delays and avoids penalty notices.
Incorrect filing information, such as a wrong address, TIN, or Social Security number, can cause IRS errors or trigger a notice. If you discover a mistake after you submit your return, you should promptly request a correction from your bank, credit union, or company. Accurate PDF copies of each form help you obtain the proper records if further assistance is needed.
Yes, even if you do not receive a 1099 because your income is below the threshold for dividends or interest, you may still need to file a federal tax return. In these cases, using trusted resources or seeking professional assistance ensures that your taxation obligations are met. Contact the IRS or visit their official page for further answers if unsure.
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