Form 1099-INT reports interest you paid during the year. The filing trigger is low: $10 or more of most interest (Boxes 1 and 3), or $600 or more for interest paid in the course of your trade or business that isn’t otherwise reportable. There’s a third trigger with no dollar floor at all — if you withheld any federal tax under backup withholding, you file a 1099-INT no matter how small the interest was. Recipient copies go out by January 31; the electronic filing to the IRS is due March 31 through IRIS.
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Who Files a 1099-INT, and When You Cross the Line
Banks file the most 1099-INTs by volume, but the form isn’t just a bank form. Anyone who pays reportable interest in the course of business can end up owing one — credit unions, brokerages, savings-and-loan associations, and even a company that pays interest on a note it owes.
The classic filer is a depository institution paying interest on savings accounts, checking accounts, CDs, and money-market accounts. If a customer earned $10 or more across their accounts with you for the year, that customer gets a 1099-INT. Ten dollars is not a typo. It’s a genuinely low bar, which is why a mid-sized bank files these by the hundred thousand.
There’s a second, higher threshold that catches business filers off guard. If you paid interest in the course of your trade or business — interest on a business loan you took from an individual, for instance, or interest included in a payment to a vendor — the reporting floor for that interest is $600, not $10. Most people never hit this case, but if you do, don’t assume the $10 rule applies. It doesn’t.
If you withheld federal income tax under the backup withholding rules — because the payee gave you a wrong TIN, or you got a B-notice — you must file a 1099-INT even if the interest was a single dollar. Any withholding at all means a form. The dollar thresholds don’t apply.
The 1099-INT, Box by Box
Most 1099-INTs are simple: a dollar figure in Box 1 and nothing else. But the form carries seventeen boxes for a reason, and the ones past Box 4 are where interest reporting gets specific. Here is what each box actually holds.
| Box | What goes in it |
|---|---|
| 1 — Interest income | Ordinary taxable interest of $10+ (savings, CDs, most accounts). The box you’ll fill most often. |
| 2 — Early withdrawal penalty | The penalty a customer forfeited for cashing a CD early. Deductible by the recipient, so report it separately — don’t net it against Box 1. |
| 3 — Interest on U.S. Savings Bonds and Treasury obligations | Interest on Treasury bills, notes, bonds, and savings bonds. State-tax-exempt, so it lives apart from Box 1. |
| 4 — Federal income tax withheld | Backup withholding you took (24%). Any amount here forces a filing regardless of the interest total. |
| 5 — Investment expenses | The recipient’s share of investment expenses from a single-class REMIC. |
| 6 — Foreign tax paid | Foreign income tax you paid or withheld on the interest, so the recipient can claim the foreign tax credit. |
| 7 — Foreign country or U.S. possession | The country or possession the Box 6 foreign tax was paid to. |
| 8 — Tax-exempt interest | Tax-exempt interest, including exempt-interest dividends from a mutual fund. |
| 9 — Specified private activity bond interest | The portion of Box 8 that’s a preference item for the alternative minimum tax. |
| 10–13 — Market discount and bond premium | Market discount (10) and the three bond-premium boxes (11–13) for covered securities you report to the IRS. |
| 14 — Tax-exempt and tax credit bond CUSIP no. | The CUSIP of a tax-exempt bond whose interest is in Box 8 or 9. |
| 15–17 — State information | State abbreviation, your state ID number, and state tax withheld — for state filing and CF/SF. |
A note on Box 2 that people get wrong: the early withdrawal penalty is not subtracted from the interest in Box 1. You report the full interest the customer earned in Box 1, then the penalty they forfeited in Box 2. The recipient deducts the penalty on their own return. If you net them together, you’ve understated the interest and cost the customer a deduction.
Early Withdrawal, Foreign Tax, and Backup Withholding
Three boxes drive most of the questions we field about 1099-INT. Get these right and the rest of the form is bookkeeping.
Box 2: the CD early-withdrawal penalty
When a customer breaks a certificate of deposit before maturity and forfeits interest as a penalty, that forfeited amount goes in Box 2. Say a saver put $20,000 into an 18-month CD, then pulled it at month six and gave up $150 in interest as the penalty. You report the interest they actually earned in Box 1 and the $150 in Box 2. The customer gets to deduct that $150 as an adjustment to income — but only if you report it where it belongs.
Box 6 and 7: foreign tax paid
If any of the interest had foreign income tax paid or withheld on it, Box 6 carries that foreign tax and Box 7 names the country it went to. This lets the recipient claim the foreign tax credit instead of eating the double taxation. It’s uncommon for a domestic savings account and routine for certain fund distributions, so it depends entirely on what you’re paying interest on.
Box 4: backup withholding
Backup withholding is the IRS’s enforcement lever. If a payee never gave you a valid TIN, or the IRS told you the TIN and name don’t match (a CP2100 or B-notice), you’re required to withhold 24% of the interest and remit it. That withholding lands in Box 4, and its presence — as noted above — means the form gets filed no matter how tiny the interest was.
The single most common reason a 1099-INT gets a penalty notice isn’t a dollar amount — it’s a name/TIN mismatch in the payee record. TIN-match your account holders before filing season. It’s far cheaper than a CP2100 and the backup-withholding scramble that follows.
The 1099-INT Deadlines You Actually Have to Hit
The 1099-INT runs on the standard information-return calendar, and it splits the recipient deadline from the IRS deadline. Miss either and the penalties stack per form — which, at bank volume, adds up fast.
| What | Deadline |
|---|---|
| Furnish recipient copy (Copy B) | January 31 |
| Paper file with the IRS | February 28 |
| Electronic file with the IRS (IRIS) | March 31 |
If you’re filing 10 or more information returns of any type in aggregate, electronic filing is mandatory — and for a bank, you’re filing electronically regardless. That extra month between the recipient deadline and the electronic IRS deadline is real breathing room. Use it to reconcile, run TIN matching, and clear rejects before the March 31 wall.
How 1099-INT Gets Filed: Through IRIS
Electronic 1099-INTs go to the IRS through IRIS, the Information Returns Intake System that’s replacing the legacy FIRE platform for the entire 1099 series.
IRIS accepts 1099-INT as a native form type, so each box — interest, early-withdrawal penalty, foreign tax, state withholding — maps to a defined XML element rather than a generic field. The state boxes (15–17) also feed the Combined Federal/State Filing program, so a single IRIS transmission can satisfy both the IRS and participating states at once.
Here’s the part that matters if you’re a bank sitting on a FIRE workflow: FIRE retires December 31, 2026. You don’t have to rebuild your export to move. e1099f takes the FIRE-format (Pub 1220) file you already produce, converts it to validated IRIS XML, and files it — same day, no new TCC, no 45-day wait.
Filing 1099-INTs by the thousand?
e1099f turns the FIRE file your core system already exports into validated IRIS XML and files it for you.
You Don’t Have to Hand-Build the XML
Built for banks
Every 1099-INT box maps to the real IRIS field — penalty, foreign tax, and state withholding included.
Pre-validated
Records are checked against the IRS business rules before we transmit, so you get a Receipt ID, not a reject.
State handled
Boxes 15–17 feed CF/SF automatically, so participating states are covered in the same file.
FIRE-format in, validated IRIS XML out — no new TCC, no 45-day wait.
Frequently Asked Questions
What is the filing threshold for a 1099-INT?
Do I subtract the early withdrawal penalty from Box 1?
When is Form 1099-INT due?
What triggers backup withholding on interest?
Where does foreign tax paid go on a 1099-INT?
Can I file 1099-INT through IRIS?
Do the state boxes handle state filing?
Not tax advice. This guide is general information for filers and may not reflect the latest IRS rules; thresholds and amounts change. Confirm current-year requirements with the IRS or a tax professional before you file.