Form 1099-OID Instructions for 2026

Before you start: What you will need

Form 1099-OID reports four categories of information: who is reporting, who holds the obligation, which obligation it is, and how much discount and interest accrued during the year. Every box on the form supports one of these four categories.

Have the following ready before filing:

• Payer's name, address, telephone number, and TIN
• Recipient's name, address, TIN, and account number, if one is assigned
• The CUSIP number or full description of each obligation
• The OID that accrued for the part of the year the recipient held the obligation
• Any qualified stated interest paid or credited during the year
• Acquisition premium, bond premium, or market discount figures for covered securities
• Any federal or state tax withheld

If a recipient has not provided a TIN, request a completed Form W-9 before filing. Without a TIN, backup withholding may be required.

What to know about Form 1099-OID for 2026

Form 1099-OID has no new boxes for 2026. The points below cover what stays the same and what still affects 2026 filings.

• The box layout is unchanged. Boxes 1 through 14 carry the same labels and functions as in prior years.
• The $10 threshold still applies. The One Big Beautiful Bill Act (OBBBA) raised several $600 reporting thresholds to $2,000, mainly on Forms 1099-NEC, 1099-MISC, and W-2. The $10 OID threshold is not one of them.
• The FIRE system retires at the end of 2026. Starting with tax year 2026 returns, IRIS is the only IRS intake system for information returns. Filers still using FIRE should complete the move to IRIS before the 2027 filing season. Learn More

Payer and recipient information instructions

The recipient's TIN may be truncated on the recipient's copy, showing only the last four digits. It must appear in full on the copy filed with the IRS. The payer's TIN can never be truncated.

The 2nd TIN not. box has one timing rule. If both IRS notices arrived in the same year, or relate to returns for the same year, do not check it yet.

If you make payments on a U.S. Treasury obligation, enter your own name, address, and TIN as the payer. Do not use those of the U.S. Treasury Department or the Bureau of the Fiscal Service.

Form 1099-OID box-by-box instructions

• Box 1: Original issue discount for the year

  Enter the taxable OID on the obligation for the part of the year the record holder owned it. Do not include OID on U.S. Treasury obligations, which belongs in Box 8.

  For example, a holder who bought a bond on July 1 reports only the OID that accrued from July 1 through December 31.

• Box 2: Other periodic interest

  Enter any qualified stated interest paid or credited on the obligation during the year. This is the regular coupon interest, separate from the discount.

  Reporting this interest on Form 1099-OID is optional. You may report it on Form 1099-INT instead. For example, qualified stated interest on Treasury Inflation-Protected Securities (TIPS) can go in Box 3 of Form 1099-INT rather than here.

• Box 3: Early withdrawal penalty

  Enter interest or principal the recipient forfeited because of an early withdrawal from a time deposit, such as a CD. This amount is deductible by the recipient. Do not reduce Box 1 or Box 2 by the forfeited amount.

• Box 4: Federal income tax withheld

  Enter any backup withholding. Backup withholding applies to amounts in Boxes 1, 2, and 8, but is limited to the cash actually paid on the obligation. You may reduce the Box 1 and Box 2 amounts by Box 3 before calculating it.

  For example, a zero-coupon bond pays no cash until maturity. Backup withholding on its yearly OID is therefore limited by the cash paid, which may be zero.

• Box 5: Market discount

  Complete this box only for a covered security acquired with market discount and OID, and only if the recipient notified you of a section 1278(b) election. Enter market discount of $10 or more that accrued during the year.

  Use the constant yield method unless the recipient notified you that they did not make a section 1276(b) election. Reporting is optional for tax-exempt covered securities acquired before January 1, 2017.

• Box 6: Acquisition premium

  For a covered security acquired with acquisition premium, enter the premium amortization for the part of the year the holder owned it. Leave this box blank if you reported a net OID amount in Box 1, 8, or 11. Box 6 is covered in more detail in the net and gross reporting section below.

• Box 7: Description

  Enter the CUSIP number of the obligation. If there is none, enter the stock exchange abbreviation, the issuer abbreviation used by that exchange, the coupon rate, and the year of maturity. For example: NYSE XYZ 12½ 25.

  If the issuer is not the payer, also enter the issuer's name.

• Box 8: Original issue discount on U.S. Treasury obligations

  Enter the OID on a U.S. Treasury obligation for the part of the year the record holder owned it. Do not include this amount in Box 1. Treasury OID is exempt from state and local income tax, which is why it has its own box.

  This box can show a negative number. A TIPS with a deflation adjustment for the year is the most common example.

• Box 9, Investment expenses

  Complete this box only if you are a single-class REMIC. Enter the regular interest holder's share of the REMIC's investment expenses. This amount is also included in Box 2, and it is not deductible by the recipient.

• Box 10, Bond premium

  For a covered security acquired at a premium, enter the bond premium amortization allocable to the interest paid during the year. For taxable securities, skip this if the holder notified you in writing that they did not want to amortize bond premium under section 171.

  If you report qualified stated interest in Box 2, any related bond premium goes here, not on Form 1099-INT. Leave Box 10 blank if you reported a net interest amount in Box 2.

• Box 11, Tax-exempt OID

  Enter the OID on a tax-exempt obligation that is a covered security acquired on or after January 1, 2017, for the part of the year the holder owned it. Reporting is optional for tax-exempt covered securities acquired before that date.

Where OID and premium go: Boxes 1, 8, 11, 6, and 10 explained

Two decisions cause most Form 1099-OID errors. The first is which box holds the OID. The second is whether premium is reported net or gross.

Choosing the right OID box

Each OID amount belongs in exactly one box, based on the type of obligation.

The recipient reads Box 2 together with the OID box. Interest in Box 2 alongside Box 8 is Treasury interest, exempt from state tax. Interest in Box 2 alongside Box 11 is tax-exempt interest.

State reporting instructions (Boxes 12 to 14)

These boxes are optional for the IRS. They are used by payers in the Combined Federal/State Filing Program or by payers whose state requires a copy of the form.

The form holds information for up to two states, one per line. If a state requires a paper copy, send it Copy 1 and give Copy 2 to the recipient for their state return. Leave these boxes blank when no state reporting applies.

Common Form 1099-OID filing mistakes

• Reporting Treasury OID in Box 1. OID on U.S. Treasury obligations belongs in Box 8 only. Placing it in Box 1 hides its state tax exemption from the recipient.
• Reporting short-term or savings bond discount on Form 1099-OID. OID on obligations of 1 year or less, and interest on U.S. Savings Bonds, belong on Form 1099-INT.
• Combining net and gross reporting. A net OID figure in Box 1 means Box 6 stays blank. A net interest figure in Box 2 means Box 10 stays blank.
• Reporting OID for the full year after a mid-year purchase. Boxes 1, 8, and 11 cover only the part of the year the record holder owned the obligation.
• Combining different obligations on one form. Certificates can share a form only when the issue, holding period, acquisition date, price, and elections all match.
• Leaving Box 7 incomplete. Enter the CUSIP number, or the full exchange, issuer, coupon, and maturity description when there is none.
• Withholding backup tax beyond the cash paid. Backup withholding on OID is limited to the cash actually paid on the obligation.

Filing your 1099-OID once it is complete

Once all applicable boxes are completed, Form 1099-OID can be filed by paper or electronically. With the FIRE system retiring at the end of 2026, e-filing is the more sustainable option regardless of current filing volume.

To e-file with TaxBandits:

• Step 1: Create a free account.
• Step 2: Select or add the business filing the return.
• Step 3: Enter the required Form 1099-OID details, following the box-by-box instructions above.
• Step 4: Review all entries, then transmit to the IRS and any applicable states.

E-File Form 1099-OID Now, starting as low as $0.80/form.

Frequently asked questions