If you paid $10 or more of interest to someone during the year, or withheld any federal tax from an interest payment, you file Form 1099-INT for that recipient. The payer instructions for Form 1099-INT come down to five things: confirm the recipient isn’t exempt, collect a W-9 with a valid Taxpayer Identification Number, fill in the right boxes for the type of interest paid, give Copy B to the recipient by January 31, and send Copy A to the IRS by February 28 on paper or March 31 electronically. Miss any of those and penalties start at $60 per form.
Who Has to File
Two dollar thresholds decide whether a 1099-INT is required. The main one is $10: if you paid at least that much in reportable interest to a single recipient, you file. The $10 threshold applies separately to Box 1 (taxable interest), Box 3 (U.S. Treasury interest), and Box 8 (tax-exempt interest).1Internal Revenue Service. About Form 1099-INT, Interest Income
A separate $600 threshold covers interest paid in the course of your trade or business that doesn’t fit the standard categories: interest on delayed death benefits from a life insurance company, interest paid with damages, and interest on state or federal tax refunds.2Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID
You also file whenever you withheld any federal income tax under the backup withholding rules, even if total interest was less than $10.
Recipients You Don’t Report
You generally don’t file a 1099-INT for payments to corporations, tax-exempt organizations, individual retirement arrangements, the United States government, or state and local governments. Collect a Form W-9 confirming that status before relying on the exclusion.
Interest paid to foreign persons is not reported on 1099-INT. A properly completed Form W-8BEN establishes the recipient’s foreign status.3Internal Revenue Service. Instructions for Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting Depending on the type of interest and any applicable treaty, you may instead have to report the payment on Form 1042-S and withhold at 30% or a reduced treaty rate. Get this backward and you can be left liable for the uncollected withholding yourself.
Collect a W-9 Before You Pay
Ask each U.S. recipient for a completed Form W-9 before you make an interest payment. The W-9 gives you the recipient’s legal name, address, and TIN, which is either a Social Security Number or an Employer Identification Number. Having this on file before money moves prevents the year-end scramble that produces most filing errors.
If the W-9 comes back with “Applied For” written in the TIN field, you have 60 days before backup withholding starts. Once those 60 days pass without a valid TIN, withhold 24% from every interest payment to that person.4Internal Revenue Service. Instructions for the Requester of Form W-9 The same 24% rate applies when a recipient refuses to furnish a TIN or when the IRS tells you the TIN on file is wrong.
The IRS offers a free TIN Matching program that verifies name-and-TIN combinations before you file. Submit the data and the IRS confirms whether it matches their records, catching transposed digits and misspelled names months before they would trigger penalty notices. You have to be listed on the IRS Payer Account File and complete an application for access; interactive single-check and bulk-upload options are both available.5Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
Filling in the Boxes
The header fields collect your name, address, and EIN as payer, and the recipient’s name, address, and TIN. A mismatch between what you enter here and what the IRS has on file is the single most common reason payers receive penalty notices, so cross-check against the W-9.
Box 1 — Interest Income
Total taxable interest paid to the recipient during the calendar year: bank deposit interest, CD interest, corporate bond interest. Do not include Treasury interest (Box 3) or tax-exempt interest (Box 8).2Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID Include any accrued qualified stated interest on bonds sold between interest payment dates.
Box 2 — Early Withdrawal Penalty
Interest forfeited when the recipient took funds out of a time deposit like a CD early. Keeping this separate from Box 1 matters to the recipient: they deduct it as an adjustment to income on Form 1040 without needing to itemize.1Internal Revenue Service. About Form 1099-INT, Interest Income
Box 3 — U.S. Savings Bonds and Treasury Obligations
Interest from U.S. Savings Bonds, Treasury bills, notes, and bonds. This interest is federally taxable but exempt from state and local tax, which is why it gets its own box. Do not also put this amount in Box 1.2Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID
Box 4 — Federal Income Tax Withheld
Any federal income tax you withheld. In practice this is almost always 24% backup withholding taken because the recipient lacked a valid TIN. The recipient claims this as a credit on their return, so accuracy affects whether their return processes cleanly.
Box 8 — Tax-Exempt Interest
Interest from state and local municipal bonds that is exempt from federal tax. Don’t also include it in Box 1. Even though no federal tax is owed, the amount can affect the taxability of Social Security benefits and can trigger AMT for certain private activity bonds, so the IRS still requires reporting.6Internal Revenue Service. Form 1099-INT, Interest Income
Boxes 6, 7, 9, and 10 Through 13
Boxes 6 and 7 report foreign tax withheld and the country it was paid to. Box 9 is for interest from specified private activity bonds. Boxes 10 through 13 cover bond premium amortization and market discount for covered securities.2Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID A bank or credit union reporting basic deposit interest will rarely touch these. Brokerages and bond issuers use them routinely.
Deadlines
Copy B goes to the recipient by January 31 of the year after the interest was paid. Most payers send it by first-class mail to the recipient’s last known address. Electronic delivery is allowed only with the recipient’s prior written consent, and if the recipient later revokes that consent you have to go back to paper.7Internal Revenue Service. Requirements for Furnishing Information Returns Electronically Keep the consent records.
Copy A goes to the IRS by February 28 on paper or March 31 electronically.
How to File with the IRS
The 10-Return Threshold
If you file 10 or more information returns of any type in the calendar year, you must file all of them electronically. The count is across return types combined, not per form. Five 1099-INTs plus five 1099-MISCs equals ten and triggers the requirement.8Internal Revenue Service. General Instructions for Certain Information Returns Below the threshold, electronic filing is still worth considering for the later March 31 deadline.
Filing Through IRIS
The IRS is retiring the older FIRE system. For tax year 2026 returns filed in 2027, the Information Returns Intake System (IRIS) will be the sole electronic filing platform.9Internal Revenue Service. Filing Information Returns Electronically (FIRE) IRIS requires a Transmitter Control Code applied for through the IRS IRIS application portal. Existing FIRE users should apply well in advance; processing can take 45 business days.10Internal Revenue Service. IRIS Application for TCC
Paper Filing with Form 1096
If you qualify to file on paper, submit Copy A of every 1099-INT along with Form 1096, which acts as the cover sheet summarizing the batch. Group all 1099-INTs under one 1096, separate from any other return types. You must use the official IRS-printed scannable forms; photocopies and forms printed from the IRS website are not accepted and can draw a penalty on their own.11Internal Revenue Service. Form 1096, Annual Summary and Transmittal of U.S. Information Returns
Remitting Backup Withholding on Form 945
If you did any backup withholding, you have a second filing to make. Deposit the withheld tax with the IRS electronically through EFTPS and report the total on Form 945, the Annual Return of Withheld Federal Income Tax, due January 31.12Internal Revenue Service. Instructions for Form 945 This is separate from the 1099-INT itself. Payers who collect backup withholding and forget Form 945 end up with two problems instead of one.
Correcting a 1099-INT After Filing
When you find an error on a form you’ve already filed, issue a corrected 1099-INT as soon as possible. Check the “Corrected” box at the top, enter the correct information, send Copy A to the IRS, and furnish a corrected Copy B to the recipient. If you filed on paper, include a new Form 1096 with the “Corrected” box checked.
How fast you correct directly determines the penalty. Two errors show up often: putting Box 3 Treasury interest in Box 1, and transposing digits in a TIN. TIN Matching before your initial filing is the best defense against the second one.
Penalties
The IRS charges penalties under IRC Section 6721 for filing information returns late, with wrong information, or not at all. For returns due in calendar year 2026 the amounts are:13Internal Revenue Service. Information Return Penalties
- $60 per form if corrected within 30 days of the due date
- $130 per form if corrected after 30 days but by August 1
- $340 per form if filed after August 1 or not filed
- $680 per form for intentional disregard, with no annual cap
Annual caps limit exposure for everything short of intentional disregard. For businesses with average annual gross receipts of $5 million or less, the caps are $239,000 for 30-day corrections, $683,000 through August 1, and $1,366,000 after August 1.14Internal Revenue Service. IRM 20.1.7 Information Return Penalties The same tiers apply under Section 6722 to statements furnished late to recipients, so a single form filed late can generate two penalties.
Records to Keep
Hold copies of every filed 1099-INT along with the supporting W-9s and payment records. The IRS recommends keeping them at least three years from the date you filed the return or the date the tax became due, whichever is later.15Internal Revenue Service. How Long Should I Keep Records? If a recipient underreports income by more than 25% the IRS can look back six years, so many payers hold records that long as a practical matter. Keep any electronic-delivery consents for the same period.