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Form 1099-INT reports the interest a person earns from a bank or others savings account to the Internal Revenue Service (IRS) of the United States. When someone receives form 1099-INT from his bank or other savings institution, he is responsible for reporting the amount of interest shown on the form on his current year tax return. Unlike a W-2 form, form 1099-INT does not need to be sent in with a tax return.
A bank or other institution is required to complete a form 1099-INT for every person who earned more than $10 US Dollars (USD) in interest, whether from a savings account or savings bond. The institution also needs to report interest earned that is tax-exempt as well as any federal and foreign tax withheld on the interest. After completing the form, the bank is responsible for making sure that a copy of it goes to the person who earned the interest. The bank is also required to send this information to the IRS.
Form 1099-INT consists of ten boxes as well as boxes for the recipient's name, address and identification number and boxes for the payer's information. In the first box, the institution enters how much interest someone earned, as long as it is over $10 USD, from a savings account from a bank or credit union, mutual savings not connected to the stock market or dividends earned from a life insurance policy. Interest earned over $10 USD from several specific tax bonds must be recorded in box 1 as well. The institution must also include any interest earned over $600 USD from state or federal tax refunds, delayed death benefits from life insurance, or interest from damages in box 1.
Box 2 on the form is for any penalty the person received on his interest. For instance, if a person cashes out a certificate of deposit before its maturity date, he often must forfeit several months' interest. Box 3 is for interest earned from Treasury bills, bonds and notes and United States Savings Bonds. If the bank took any federal tax out of the interest, the amount should be entered in box 4. Any investment expenses should be reported in box 5. Foreign tax paid and the country it was paid to are entered in boxes 6 and 7.
Boxes 8 and 10 are for tax exempt interest. The interest reported in box 8 should be used to fund a government operation and must be issued by a state, possession, Washington, D.C. or an Indian reservation. In box 10, the institution should enter the Committee on Uniform Securities Identification Procedures (CUSIP) number used to identify interest earned on a tax exempt bond.