Even small reporting errors can cost payers time and money. The IRS uses different 1099 forms for specific payment types. While some forms are very distinct and straightforward, it is not uncommon for new payers to mix up Form 1099-MISC with Form 1099-INT. You may end up using the incorrect form if you are not aware of the exact difference between 1099-MISC and 1099-INT, which in turn can result in penalties for incorrect submissions.
Read on to understand 1099-MISC vs. 1099-INT in detail, including key thresholds and filing requirements.
What Is Form 1099-MISC and Who Uses It
Most businesses use Form 1099-MISC to report rents, prizes, awards, settlements, and other non-service payments that meet the $600 miscellaneous threshold. Professional service fees should not be reported here; they belong on Form 1099-NEC (Box 1) for nonemployee compensation.
Payers must also file Form 1099-MISC for any amount when 24% backup withholding applies. Following the proper Form 1099-MISC payer rules ensures consistent income reporting and helps prevent IRS mismatches and risk of penalties from incorrect filings.
Send recipient copies by February 2, 2026 (since January 31, 2026, falls on a Saturday). File with the IRS by March 31, 2026, if e-filing, or March 2, 2026, if filing on paper. If reporting only amounts in Box 8 or Box 10, provide recipient copies by February 17, 2026.
What Is Form 1099-INT and Who Uses It
Form 1099-INT covers another category of income entirely, like interest credited by a payer. It’s typically filed by banks and credit unions, but it also applies to businesses that pay $600 or more in business-related interest, such as late-payment charges on invoices or escrow interest. Following the correct Form 1099-INT payer rules ensures that payers stay aligned with both federal and state reporting expectations.
The form includes several key data points. Key fields capture standard and Treasury interest, early-withdrawal penalties, and any backup or foreign tax withheld.
Deadlines follow the same schedule as Form 1099-MISC send recipient copies by February 2, 2026 (adjusted for the weekend) and e-file with the IRS by March 31, 2026.
Why Choosing the Correct Form Matters
Selecting the correct form helps ensure accurate reporting. Sending the wrong form can double-report income or misclassify payments, both of which invite penalties under IRC sections 6721-6722.
1099-MISC vs 1099-INT: Key Differences at a Glance
Both forms fall under the 1099 umbrella, but they report different payments. Here’s how a payer can tell which applies:
| Category | Form 1099-MISC | Form 1099-INT |
|---|---|---|
| Purpose | Payments for rents, royalties, prizes/awards, certain other income, and specific items like medical payments and gross proceeds to attorneys; (service fees belong on Form 1099-NEC) | Interest paid on deposits, bonds, or overdue invoices |
| When to file | Once total miscellaneous payments hit the $600 threshold (or $10 for royalties) | When you paid at least $10 of reportable interest (boxes 1, 3, or 8), or had $600 or more as interest paid in the course of your trade or business, or if any federal backup withholding was withheld and not refunded, or any foreign tax was withheld and paid |
| Backup withholding | Report any amount if 24% tax was withheld | Same rule if federal income tax was withheld under backup withholding and not refunded, the payment is reportable regardless of the amount |
| Who typically files | Real-estate firms, insurers, law firms, healthcare payers, or contest sponsors | Banks, credit unions, SaaS lenders, and broker-dealers |
| Common payer mix-ups | Using 1099-MISC for service fees that belong on 1099-NEC | Skipping Box 4 for withheld tax or misreporting U.S. bond interest |
| Corporate exceptions | Most corporations are exempt, but payers must still report medical payments (Box 6) and attorney proceeds (Box 10) on Form 1099-MISC, while attorney fees for services go on Form 1099-NEC (Box 1) | Corporate entities are generally exempt from Form 1099-INT — file only if you withheld and paid foreign tax on the interest, or if federal income tax was withheld under backup withholding and not refunded |
Threshold Rules and Edge-Case Scenarios
Thresholds look simple, but they’re often where payers go wrong. Below are some important distinctions and scenarios to be mindful of:
- $600 vs $10 vs $0: The $600 miscellaneous threshold applies to most Form 1099-MISC payments, while Form 1099-INT generally starts at a $10 interest threshold. Once 24% backup withholding applies, thresholds disappear, and any amount becomes reportable.
- Attorney and medical payments: Report medical payments on Form 1099-MISC (Box 6) even if the payee is incorporated. Report attorney fees for services on Form 1099-NEC (Box 1), and gross proceeds to attorneys on Form 1099-MISC (Box 10).
- Mixed settlements: If a single payment includes both settlement for damages and interest, split it Box 3 of Form 1099-MISC for the settlement and Box 1 of Form 1099-INT for the interest portion.
- Foreign accounts and FATCA: Only check the FATCA box when the Form 1099 is filed to meet a FATCA (chapter 4) reporting requirement; otherwise, leave it unchecked.
- E-file rule for 2026: Any payer submitting 10 or more total information returns (aggregate of all types) in a tax year must e-file. If you are required to e-file according to the e-file mandate and fail to do so without a waiver that is approved, you may be subject to penalties.
Completing the Crucial Boxes
Each box captures a different piece of the reporting requirement:
Form 1099-MISC
- Box 1: Rent (include CAM if not invoiced separately)
- Box 3: Other income (for example, prizes and awards)
- Box 6: Medical payments even to corporations
- Box 10: Gross attorney proceeds
- Box 4: Record 24% backup withholding
Form 1099-INT
- Box 2: Early-withdrawal penalty (deductible)
- Box 4: Report any federal income tax withheld. Backup withholding should also be reported using Form 945
- Box 6/7: Foreign tax and country name
Note: Report regular interest in Box 1 and U.S. Treasury or government bond interest in Box 3; never enter the same amount in both.
Tip: Run TIN-Matching before submission. Most CP2100 notices trace back to unverified names or outdated W-9s.
Frequent Payer Errors and Quick Fixes
Even experienced payers make small filing mistakes that can cause IRS rejections and increase the risk of penalties. Here’s how to spot and fix the most common ones:
| Common Error | When Filing Is Required (Correct Action) | How to Fix |
|---|---|---|
| Reporting interest under $10 with no withholding | File Form 1099-INT only if: (a) total interest is $10 or more (Boxes 1, 3, or 8), or (b) any amount if you withheld and didn’t refund backup withholding or paid foreign tax. | File a “CORRECTED” 1099-INT (Error Type 1) with $0 in the amount box(es); retransmit via IRIS (or mail Copy A with Form 1096); furnish the corrected recipient copy. |
| Issuing Form 1099-INT to exempt corporations | Corporations generally don’t receive 1099-INT. File only if you withheld federal income tax (backup withholding) and didn’t refund it, or paid foreign tax. | Submit a “CORRECTED” 1099-INT (Error Type 1) with $0 in the amount box(es); retransmit via IRIS (or mail with Form 1096); furnish the corrected recipient copy. |
| Using Form 1099-MISC for business interest | Interest belongs on 1099-INT (not 1099-MISC). Report when the thresholds above are met. | Do a Type 2 correction (wrong form) — there are two steps: 1. File a “CORRECTED” 1099-MISC with $0 in all amount boxes. 2. File a new original 1099-INT with the correct amounts; furnish the corrected recipient statement. |
| Omitting Box 4 (Federal income tax withheld) when backup withholding was taken | If you took backup withholding, you must show the withheld amount in Box 4 on the 1099 and include it on Form 945 for the year. | File a “CORRECTED” 1099 (Error Type 1) with the proper Box 4 amount; retransmit via IRIS (or paper with Form 1096); furnish the corrected recipient copy; make sure Form 945 matches. |
| Skipping the FATCA filing requirement checkbox when FATCA applies | If the 1099 is filed to satisfy a Chapter 4 (FATCA) U.S. account reporting obligation, the FATCA checkbox must be marked. | File a “CORRECTED” 1099 (Error Type 1) with the FATCA box checked; retransmit via IRIS (or paper with Form 1096); furnish the corrected recipient copy. |
Real-World Scenarios
Use this quick reference table to decide which form applies in common payment situations.
| Payer Situation | Right Form / Box | Reason |
|---|---|---|
| A software vendor reimburses a client $700 in late-payment interest | 1099-INT, Box 1 | Business-related interest ≥ $600 triggers reporting |
| A wellness brand gives a $900 wellness retreat prize to a customer | 1099-MISC, Box 3 | Report if the total amount for prizes or awards adds up to $600 or more |
| An investment firm withholds 24% tax on a $20 bond payout | 1099-INT, Boxes 1 & 4 | Backup withholding makes the payment reportable regardless of the amount |
Closing Thoughts
Understanding how Form 1099-MISC and Form 1099-INT differ, and applying those rules correctly during filing, helps payers stay compliant, avoid CP2100 notices, and prevent costly corrections or penalties later. To sum it up, use Form 1099-MISC for rents, prizes, and other non-service payments, report professional service fees on Form 1099-NEC (Box 1), and use Form 1099-INT for reportable interest income.
FAQs
1. Must a payer ever issue 1099-INT to a corporation?
Usually, not, as corporations are exempt from receiving Form 1099-INT. File only if federal income tax (Box 4) or foreign tax (Box 6) was withheld and not refunded.
2. Can one recipient receive both forms?
Yes. For example, a landlord who receives $800 in rent and $15 in escrow interest would get both forms Form 1099-MISC for rent and Form 1099-INT for interest.
3. Do thresholds apply when backup withholding occurs?
No, once 24% backup withholding is applied, all amounts become reportable.
4. How should misfiled forms be corrected?
File a CORRECTED return to fix the wrong form (for example, if a payment was reported on 1099-MISC instead of 1099-INT). Then file a new original return on the correct form with the right amounts and details. Follow the IRS correction steps in the General Instructions for Information Returns (GIR), don’t check the VOID box, as it isn’t considered a valid correction.
5. Is paper filing still allowed?
Paper filing is allowed only if you file fewer than 10 total information returns for the year or you have an approved waiver; otherwise, you must e-file.
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