
Understanding Your Form 1099-G, Certain Government Payments
If you received payments from the federal or state government, these will be reported on your Form 1099-G. Read on to learn more about this form.
Form 1099-INT is furnished to you by your financial institution, broker, or other entity that has paid you interest totalling $10 or more during the year.
It is common for taxpayers who have investment and wealth management accounts to receive a “1099 combination statement” from the financial institution which consolidates several investment-related tax forms such as 1099-INT, 1099-DIV, and 1099-B.
All other payers will issue Form 1099-INT where appropriate. Common types of interest income include interest on savings accounts, CDs, and corporate and government bonds. Interest can also comprise part of a mutual fund distribution, and accrue on security deposits you made.
Form 1099-INT is used to report interest earned from all accounts other than bonds sold below face value and interest earned in a mutual fund.
Form 1099-OID is used to report the annual increase in the value of a bond sold below face value.
Form 1099-DIV will include interest earned on a mutual fund.
Income reported on both 1099-INT and 1099-OID is considered investment income and is taxed as ordinary income. This means interest doesn’t get the same lower capital gain rate as long-term capital gains and certain dividend income.
The left side of Form 1099-INT reports you and the payer's address, tax identification number, and account number. Most taxpayers are likely to encounter the following boxes filled out on their Forms 1099-INT:
Box 1 reports the interest income you received, which would be reported on your tax return as ordinary interest.
However, if Box 3 reports interest on US treasury bonds or specific municipal and private activity bonds in Boxes 8 and 9, you still need to report them though they may result in different tax treatment. US treasury bonds are not taxable on state tax returns but are taxable on federal tax returns.
Municipal bonds, reported in boxes 14, 15, and 16, are not taxable on the federal return but the Form 1099 does specify which states are applicable because you may also receive state-level tax exemptions for these bonds.
Form 1099-INT may also have federal income taxes withheld in Box 4 if you are subject to backup withholding. If you are not mandated to have backup withholding, as is the case with most US citizens, you will need to make estimated tax payments if you have significant interest income.
If you have foreign investments, your broker may automatically withhold foreign taxes (such as Ireland's dividend and interest retention tax). If you cannot get a refund for these taxes or seek exemption from them from the foreign government in question, you may be eligible for the foreign tax credit or foreign tax deduction.
About the Author
Jo Willetts, Director of Tax Resources at Jackson Hewitt, has more than 25 years of experience in the tax industry. As an Enrolled Agent, Jo has attained the highest level of certification for a tax professional. She began her career at Jackson Hewitt as a Tax Pro, working her way up to General Manager of a franchise store. In her current role, Jo provides expert knowledge company-wide to ensure that tax information distributed through all Jackson Hewitt channels is current and accurate.
If you received payments from the federal or state government, these will be reported on your Form 1099-G. Read on to learn more about this form.
What is IRS Form 1099-K? Learn why you received this form and what it is used for here.
Form 1099-R is part of the IRS Forms 1099 series and issued whenever you receive more than $10 in retirement income.
Our Tax Pros will connect with you one-on-one, answer all your questions, and always go the extra mile to support you.
We have flexible hours, locations, and filing options that cater to every hardworking tax filer.
We won't stop until you get every dollar you deserve, guaranteed. It's what we've been doing for over 35 years.