1099-R vs 1099-INT: Reporting, Tax Treatment, and Key Boxes

A 1099-R and a 1099-INT both report income to you and to the IRS, but they cover different money. Form 1099-INT reports interest a bank, credit union, or brokerage paid you during the year. Form 1099-R reports a distribution from a retirement account, pension, or annuity. Interest on a 1099-INT is almost always fully taxable at your ordinary rate. A 1099-R distribution might be fully taxable, partially taxable, or completely tax-free, depending on the type of account, your age, and how the money came out.

Both forms share a $10 reporting threshold, and both can carry backup withholding. Past that, they behave differently on your return.

What Each Form Reports

A 1099-INT comes from a financial institution when it pays you $10 or more in interest during the year.¹ The interest typically comes from savings accounts, certificates of deposit, money market accounts, and bonds. Interest from U.S. Treasury securities lands here too, and while it is federally taxable, it is exempt from state and local income tax.² One thing to keep in mind: even if you earned less than $10 and never received a form, the interest is still taxable. The $10 threshold controls the paperwork, not your tax liability.

A 1099-R covers a much broader set of transactions. A plan administrator or custodian issues it for any retirement-plan distribution of $10 or more.³ The same form shows up for:

Regular withdrawals from a 401(k), 403(b), pension, or IRA at age 59½ or later
Early withdrawals taken before 59½, which may carry a 10% additional tax⁴
Direct rollovers from an old 401(k) into a new IRA, where no tax is actually owed
Roth conversions, which are taxable on the converted amount⁵
Death benefits paid to a beneficiary
Required minimum distributions

Because the same form covers all of these, getting a 1099-R does not automatically mean you owe tax. The distribution code in Box 7 tells you and the IRS which situation you’re in.

How the Tax Treatment Differs

Interest on a 1099-INT is ordinary income. The full taxable amount from Box 1 goes into your adjusted gross income and is taxed at your marginal rate, which reaches 37% for 2026.⁶ The main exception is municipal bond interest in Box 8, which is generally exempt from federal tax but still has to appear on your return because it can affect the taxability of Social Security benefits.¹

A 1099-R distribution depends on what kind of account the money came from:

Traditional IRAs and 401(k)s are generally fully taxable, because the contributions were deducted going in.
Roth IRAs and Roth 401(k)s pay out completely tax-free if the distribution is qualified. The account must have been open at least five years and you must be at least 59½, or meet a limited exception like disability.
Accounts that include after-tax (non-deductible) contributions pay out partially taxable. The earnings are taxed; the return of your own after-tax money is not. Publication 575 explains how to figure the tax-free portion using the Simplified Method or the General Rule.⁷

There’s a further wrinkle for higher earners. The 3.8% net investment income tax kicks in when modified AGI exceeds $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately).⁸ Interest on a 1099-INT is net investment income and can be hit by that surtax. Most retirement distributions on a 1099-R are not treated as net investment income and escape the 3.8% tax, even though they still raise your AGI and can push other investment income across the threshold.

The Boxes That Actually Drive Your Return

On the 1099-INT

Box 1, Interest Income. The total taxable interest for the year. This is the figure you carry to your 1040. If your total taxable interest from all sources tops $1,500, you also file Schedule B.
Box 3, U.S. Savings Bonds and Treasury Obligations. Federally taxable but exempt from state and local tax. It’s already inside Box 1, so you don’t add it a second time; you use it to claim the state exemption on your state return.¹
Box 8, Tax-Exempt Interest. Municipal bond interest. Not federally taxable, but it still has to appear on your 1040.¹

On the 1099-R

Box 1, Gross Distribution. The total paid out before taxes or other deductions.
Box 2a, Taxable Amount. The portion subject to federal income tax. For a fully taxable traditional IRA withdrawal, this matches Box 1. For a rollover, it should read zero. If Box 2b’s “Taxable amount not determined” is checked, the payer is telling you to work out the taxable portion yourself using Publication 575.³
Box 7, Distribution Code. A single-digit or letter code that tells the IRS exactly what kind of transaction this was, and whether it should look for a penalty.

IRA distributions go on Form 1040 lines 4a and 4b. Pension and annuity distributions go on lines 5a and 5b.

Distribution Codes to Watch on the 1099-R

Box 7 is where errors on a 1099-R do the most damage. The code drives whether the IRS expects the 10% early-withdrawal penalty and whether the payment counts as taxable at all.³ The most common codes:

Code 1, early distribution with no known exception. You took money out before 59½ and the payer didn’t apply an exception. The IRS will look for the 10% additional tax. If you actually qualify for an exception, such as a first-time home purchase or disability, you claim it on Form 5329.⁴
Code 2, early distribution with an exception applied by the payer. Examples include separating from service at age 55 or older, or a Roth conversion.
Code 4, death. Payment to a beneficiary after the account holder died. Applies regardless of the deceased’s age.
Code 7, normal distribution. A standard withdrawal at 59½ or older. No early-withdrawal penalty.
Code G, direct rollover to another eligible retirement plan. Box 2a should be zero and no tax is owed.³

If the code looks wrong (say, a Code 1 when you left your employer at 56 and should qualify for the age-55 exception) ask the plan administrator for a corrected form. Otherwise the IRS will expect the penalty, and you’ll have to unwind it on Form 5329.

Rules That Apply to One Form but Not the Other

Required minimum distributions are a 1099-R issue, not a 1099-INT issue. Once you reach age 73, you must start taking RMDs from most retirement accounts, including traditional IRAs, 401(k)s, and 403(b)s. Each RMD generates a 1099-R. Roth IRAs are the exception during the original owner’s lifetime. Miss an RMD entirely and the excise tax is 25% of the shortfall, dropping to 10% if you correct it within two years.⁹ Nothing similar applies to interest income; savings accounts and CDs have no mandatory withdrawal rules.

Backup withholding, by contrast, can hit either form. If you fail to give the payer a correct taxpayer identification number, or the IRS has notified the payer that you previously underreported interest or dividend income, the payer must withhold at a flat 24%.¹⁰ The amount shows up in Box 4 on either form and gets claimed as a tax payment on your return, the same way regular withholding does.

If a Form Is Wrong or Missing

If a 1099-INT or 1099-R hasn’t arrived by early February, contact the payer. If it still hasn’t shown up by the end of February, call the IRS at 800-829-1040. The IRS will contact the payer and send you Form 4852 to use as a substitute.¹¹ You estimate the amounts, file on time, and amend later if the actual form differs.

If the form arrives with errors, ask the payer for a corrected version, which will have the “CORRECTED” box checked at the top. Don’t just ignore the mistake. The IRS gets its own copy, and its automated matching system will flag any gap between what the payer reported and what you put on your return.

That’s also why leaving a 1099 off the return is a bad bet. The accuracy-related penalty for negligence is 20% of the underpaid tax, and the IRS specifically cites omitted 1099 income as an example of negligence.¹² The safer approach is to report every 1099 you receive. If a piece of income isn’t taxable, because it’s a rollover, a return of basis, or tax-exempt interest, there’s a proper place on the return to say so.

1
Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID (01/2024)
2
Internal Revenue Service. Topic No. 403, Interest Received
3
Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025)
4
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
5
Internal Revenue Service. Retirement Plans FAQs Regarding IRAs
6
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
7
Internal Revenue Service. Publication 575 (2025), Pension and Annuity Income
8
Internal Revenue Service. Topic No. 559, Net Investment Income Tax
9
Internal Revenue Service. Retirement Topics – Required Minimum Distributions (RMDs)
10
Internal Revenue Service. Backup Withholding
11
Internal Revenue Service. Topic No. 154, Form W-2 and Form 1099-R (What to Do if Incorrect or Not Received)
12
Internal Revenue Service. Accuracy-Related Penalty