Form 1099-INT is used to report interest income paid to a person through savings accounts, US Savings bonds, and interest-bearing checking accounts, or in the course of trade or business. With a relativity low interest income threshold of $10, payers must issue a 1099-INT form to all parties from the previous tax year that exceed the threshold.
Who receives Form 1099-INT?
The IRS instructs that Form 1099-INT form must be completed for each person:
- To whom you paid amounts reportable in Interest Income, Interest on US Savings Bonds and Treas. Obligations, and Tax-Exempt Interest of at least $10; or at least $600 of interest paid in the course of your trade or business not meeting the Interest Income criteria;
- For whom you withheld and paid any foreign tax on interest; or
- From whom you withheld (and did not refund) any federal income tax under the backup withholding rules regardless of the amount of the payment.
There are some notable exceptions that are not required to be reported on a Form 1099-INT. These include:
- Payments made to certain payees including, but not limited to, a corporation, a tax-exempt organization, any individual retirement arrangement (IRA), Archer medical savings account (MSA), Medicare Advantage MSA, health savings account (HSA), a U.S. agency, a state, the District of Columbia, a U.S. possession, a registered securities or commodities dealer, nominees or custodians, brokers, or notional principal contract (swap) dealers.
- Interest on an obligation issued by an individual.
- Interest on amounts from sources outside the United States paid outside the United States by a non-U.S. payer or non-U.S. middleman.
- Certain portfolio interest.
- Interest on an obligation issued by an international organization and paid by that organization.
- Payments made to a foreign beneficial owner or foreign payee.
- Tax-deferred interest, such as interest that is earned but not distributed from an IRA.
However, there are or may be some exceptions to the exceptions. It is always best to consult your tax advisor if you are unsure about the reporting requirements. See the IRS instructions for Form 1099-INT for more details.
Who must file Form 1099-INT?
This form is filed by the business or entity that pays interest out of the following:
- Investment Firms
- Mutual Funds Brokerages
- Banks Investment firms
These types of entities must distribute Form 1099-INT when they withhold federal income tax and do not refund the amount.
What information is required to file 1099-INT?
The information required for preparing Form 1099-INT includes the taxpayer names, addresses, and the identification numbers for the reporting business (“payer”) and the recipient (“payee”), as well as the amounts paid to the recipient. To get more information about which parts of data are required from the “payer” and “payee”, check out Gathering Information to Prepare Form 1099-INT.
Form 1099-INT is an official IRS document to report interest that payers or businesses made to eligible recipients. This form is sent to the IRS, any applicable states, and the recipients.
Download our guide to understanding Form 1099-INT to become a master on these forms.
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.