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1099 for Interest Income:
Who Files Form 1099-INT and When?
When interest income needs a 1099, how the $10 and $2,000 thresholds apply,
which box each type of interest goes in, and the steps payers follow
from W-9 to filing.
By Charles Hardy | Last updated: Nov 06, 2026
Key Insights: 1099 for interest income
- Interest income is reported on Form 1099-INT once the yearly total paid to a recipient reaches $10 for most interest in Boxes 1, 3, and 8.
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For 2026 payments, certain interest paid in the course of a trade or business has a separate $2,000 threshold, up from $600 under the One Big Beautiful Bill Act (OBBBA). The $10 rule for bank and bond interest did
not change. - Interest paid to exempt recipients, such as corporations, tax-exempt organizations, and IRAs, is generally not reported. Interest paid to nonresident aliens goes on Form 1042-S.
- A 1099-INT is required regardless of amount when backup withholding applied or foreign tax was withheld on the interest.
Does interest income need a 1099?
Yes, in most cases. Interest income needs a 1099 when a bank, financial institution, government agency, or business pays reportable interest to a non-exempt recipient and the yearly total reaches the threshold. The form used is Form 1099-INT. Interest most often reportable includes:
- Savings, checking, and money deposit accounts at banks and credit unions
- Certificates of deposit (CDs), including early withdrawal penalties
- Corporate bonds and other taxable debt instruments
- U.S. Treasury bills, notes, bonds, and U.S. Savings Bonds
- Tax-exempt municipal bonds, reported separately as tax-exempt interest
- Certain interest a business pays, such as interest on a damages award or a delayed payment
The threshold depends on what kind of interest it is and who pays it.
| Type of interest | 2026 threshold | Form and box |
|---|---|---|
| Bank, credit union, and taxable bond interest | $10 | 1099-INT, Box 1 |
| U.S. Savings Bonds and Treasury obligations | $10 | 1099-INT, Box 3 |
| Tax-exempt interest, such as municipal bonds | $10 | 1099-INT, Box 8 |
| Certain interest paid in the course of a trade or business | $2,000 | 1099-INT, Box 1 |
| Any interest subject to backup withholding or foreign tax | Any amount | 1099-INT, Box 4 or Box 6 |
Five checks for reportable interest income
An interest payment generally requires a Form 1099-INT when it passes each of these checks.
| Check | Question | Passes when |
|---|---|---|
| Payment type | Is the payment interest? | The payment is interest, not a dividend, a return of principal, or original issue discount (OID) reported on Form 1099-OID |
| Payer | Who issued the obligation? | A bank, financial institution, corporation, government agency, or business. Interest on an obligation issued by an individual is generally not reportable |
| Recipient type | Is the recipient an exempt recipient? | No. The recipient is an individual, sole proprietor, partnership, estate, trust, or an LLC taxed as a sole proprietor or partnership |
| Recipient status | Is the recipient a U.S. person? | Yes. Interest paid to nonresident aliens and foreign entities is reported on Form 1042-S instead |
| Amount | How much interest was paid during the year? | $10 or more for most interest, $2,000 or more for certain trade-or-business interest paid in 2026, or any amount if backup withholding or foreign tax applied |
The Form W-9 confirms both the recipient’s tax classification and whether an exempt payee code applies, so it settles the recipient type and recipient status checks before the first interest payment.
The $10 vs. $2,000 1099-INT threshold for 2026
Form 1099-INT now has two dollar thresholds, and they come from two different sections of the tax code.
| $10 threshold | $2,000 threshold | |
|---|---|---|
| Tax code section | IRC Section 6049 | IRC Section 6041, as amended by OBBBA |
| Changed for 2026? | No | Yes. Was $600 for payments through 2025 |
| Typical payers | Banks, credit unions, brokers, bond issuers, the U.S. Treasury | Businesses that pay interest outside of a financial account or registered debt |
| Common examples | Savings and CD interest, bond coupons, Treasury interest, municipal bond interest | Interest on a damages award or court judgment, interest on a delayed payment, certain private business loans |
| Boxes | Box 1, Box 3, Box 8 | Box 1 |
Example: A business settles a dispute with an individual and pays $1,500 of interest on the settlement amount in 2026. Because the interest falls under Section 6041 and is below $2,000, no 1099-INT is required. If a bank paid the same person $1,500 of savings interest, a 1099-INT would be required because bank interest follows the $10 rule.
Which Form 1099-INT box does each type of interest go in?
Form 1099-INT separates interest by tax treatment. Taxable interest, such as bank and corporate bond interest, goes in
Box 1. Interest on U.S. Savings Bonds and Treasury obligations goes in Box 3, and tax-exempt interest, such as municipal bond interest, goes in Box 8.
The remaining boxes cover early withdrawal penalties, backup withholding, foreign tax paid, bond premium and market discount adjustments, and state information.
Learn more about each box in the Form 1099-INT instructions.
1099-INT vs. other forms: Where interest-like payments are reported
Some payments look like interest but belong on a different form. The deciding factor is what the payment actually is and who receives it.
| Payment | Form | Why |
|---|---|---|
| Savings, CD, and bond interest | 1099-INT | Standard interest income |
| Original issue discount on a bond bought below face value | 1099-OID | OID accrues over time instead of being paid as stated interest |
| Money market fund earnings | 1099-DIV | Funds pay dividends, even when statements call them interest |
| Substitute payments in lieu of interest | 1099-MISC, Box 8 | Paid by brokers on loaned securities, not by the issuer |
| Interest paid to nonresident aliens or foreign entities | 1042-S | Foreign persons follow separate withholding and reporting rules |
| Mortgage interest a borrower pays to a lender | 1098 | Reports interest received by the lender from the borrower, not interest paid to an investor |
A payer does not need to file both Form 1099-INT and Form 1099-OID for the same obligation. When a bond has OID, the stated interest goes in Box 2 of Form 1099-OID along with the discount.
Who gets a 1099-INT for interest income?
| Interest recipient | 1099-INT generally required? |
|---|---|
| Individual or sole proprietor | Yes |
| Partnership, LLP, or LP | Yes |
| LLC taxed as a sole proprietor or partnership | Yes |
| Estate or trust | Yes |
| C corporation, S corporation, or LLC taxed as a corporation | Generally no. Corporations are exempt recipients for interest |
| Tax-exempt organization, IRA, or government entity | No. Exempt recipient |
| Bank, broker, or other financial institution | No. Exempt recipient |
| Nonresident alien or foreign entity | No. Separate rules apply, including Form W-8 and Form 1042-S |
Interest income mostly flows to individual account holders and investors, so most 1099-INT forms go to people rather than businesses. The Form W-9 confirms the recipient’s classification and lists any exempt payee code.
1099 interest income requirements: Three steps for payers
The requirements follow one order. Each step depends on the one before it, which is why the Form W-9 comes first.
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Step 1: Collect Form W-9 before the first interest payment.
Form W-9 tells the payer whether the recipient is reportable and provides the information needed to prepare
Form 1099-INT:- Legal name and business name, if different
- Federal tax classification
- Exempt payee code, if any
- Address
- Taxpayer identification number (TIN)
- Signed certification, including the backup withholding certification
If a recipient does not provide a TIN, or the IRS notifies the payer that the TIN is incorrect, the payer must generally apply 24% backup withholding to interest payments and report it in Box 4.
TaxBandits W-9 Manager moves this step online. Businesses can:
- Send W-9 requests by email, text, SmartCollect link, or QR code
- Let account holders and lenders complete and e-sign the form from any device
- Validate TINs against IRS records with TIN Matching and check addresses with USPS validation
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Step 2: Classify and track interest by box.
Throughout the year, record interest paid to each recipient by type: taxable interest, Treasury interest, tax-exempt interest, and any early withdrawal penalties, withholding, or foreign tax. Note whether each payment falls under the $10 rule or the $2,000 trade-or-business rule.
At year-end, total each recipient’s interest by box and compare it against the five eligibility checks and the applicable threshold.
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Step 3: File and furnish by the deadline.
The payer files Form 1099-INT with the IRS and sends a copy to each recipient. For interest paid in 2026, the deadlines are:
Form Recipient copy IRS paper filing IRS e-filing 1099-INT (2026 interest) February 1, 2027 March 1, 2027 March 31, 2027 The usual January 31 and February 28 dates fall on a weekend in 2027, so they move to the next business day. Payers can get an automatic 30-day extension to file with the IRS by submitting Form 8809 before the original due date. If you need more time to furnish recipient copies specifically, file Form 15397 by the original due date. Filers submitting 10 or more information returns in total must generally e-file.
Learn more about 1099 deadlines and penalties.
TaxBandits simplifies e-filing Form 1099-INT, Form 1099-OID, and other 1099 forms with the IRS and states, and distributes recipient copies by postal mail or online.
Frequently asked questions
No. Bank and bond interest is reported under Section 6049, which OBBBA did not change. Banks and credit unions still file Form 1099-INT for $10 or more of interest paid to a recipient.
Generally no. Corporations, including LLCs taxed as corporations, are exempt recipients for interest reporting. Tax-exempt organizations, IRAs, government entities, and financial institutions are also exempt.
Generally no. Interest on an obligation issued by an individual, such as a personal loan or seller-financed home sale, is not reported on Form 1099-INT by the person paying it. The recipient still reports the interest as income.
No. Money market funds pay dividends, so their earnings are reported on Form 1099-DIV, even when account statements describe them as interest.
Form 1099-INT reports stated interest paid during the year. Form 1099-OID reports original issue discount on debt bought below face value. When a bond has OID, both amounts go on Form 1099-OID.
The payer must generally apply 24% backup withholding to the interest and report it in Box 4. A Form 1099-INT is then required regardless of the amount.
