Understanding Form 1099-INT Reporting Rules for Banks in Tax Year 2026

To answer when banks are required to send 1099-INT, we need to consider the amount paid, the type of interest, and whether withholding applies or another special reporting rule applies.

What Is Form 1099-INT?

Form 1099-INT, Interest Income, is an IRS information return used to report interest income of at least $10 paid during the calendar year. The $2,000 threshold applies to limited trade-or-business interest payments regulated under Section 6041.

Banks, credit unions, savings institutions, brokers, and other payers may use this form to report:

• Savings-account interest
• Interest-bearing checking-account interest
• Money-market deposit account interest
• Certificate of deposit interest
• Interest on U.S. savings bonds and Treasury obligations
• Certain tax-exempt interest
• Federal income tax withheld from interest

When Are Banks Required to Send a 1099-INT?

Under IRC §6049 and bank interest reporting requirements, a bank or a financial institution must file Form 1099-INT for a recipient when one or more of the following requirements apply:

1. The bank paid or credited at least $10 in reportable interest to the recipient
2. The bank withheld and paid foreign tax on the recipient’s interest
3. The bank applied backup withholding under the federal rules, regardless of the payment amount

For ordinary bank interest subject to reporting, the 1099-INT minimum amount of $10 applies to the recipient’s total interest with the same bank, rather than separately to each individual interest payment.

Interest is reportable when it is credited and available to the recipient, even if it was not withdrawn.

Understanding when banks issue Form 1099-INT statements is important for staying compliant.

Does the OBBBA $2,000 Threshold Apply to Bank Interest?

For certain payments made after December 31, 2025 and reported on Form 1099-MISC, Form 1099-NEC, and Form W-2G, OBBBA raised the threshold under IRC §6041 from $600 to $2,000.

However, since Form 1099-INT is governed by IRC §6049, which OBBBA did not change. The 2026 1099-INT threshold for certain bank interests remains at $10. But the $2,000 threshold may apply to certain limited trade-or-business interest payments, governed by IRC §6041, such as interest on certain private business loans.

Common Form 1099-INT Reporting Situations

Understanding when are banks required to send 1099-INT also means knowing how specific situations are handled. Here are a few common bank interest reporting requirement situations:

Important Form 1099-INT Boxes

When filing Form 1099-INT, using the correct boxes ensures interest income is reported properly according to IRS requirements.

Box 1: Interest Income

Box 1 reports taxable interest paid to the recipient’s account during the year, including interest from:

• Savings accounts
• Interest-bearing checking accounts
• Money-market deposit accounts
• Certificates of deposit
• Certain account-opening bonuses treated as interest

Box 2: Early Withdrawal Penalty

This box reports the deductible penalty charged when a customer withdraws funds early from a time deposit, such as a CD. The gross interest stays reportable in Box 1, while the early-withdrawal penalty is always reported separately in Box 2.

Box 3: Interest on U.S. Savings Bonds and Treasury Obligations

Use Box 3 for interest from U.S. savings bonds, Treasury bills, Treasury notes, and Treasury bonds. This interest is federally taxable but generally exempt from state and local income taxes.

Box 4: Federal Income Tax Withheld

Enter federal tax withheld under the backup withholding rules. This applies when the recipient doesn’t provide a TIN or provides an incorrect TIN. The IRS can also send a notification to the bank to withhold.

Boxes 8 and 9: Tax-Exempt Interest

Box 8 reports qualifying tax-exempt interest paid to the recipient’s account. While Box 9 identifies the portion attributable to specified private activity bonds.

Who Generally Does Not Receive Form 1099-INT?

There are certain recipients that are exempt from the Form 1099-INT reporting requirement. Knowing who must receive Form 1099-INT is just as important as knowing when banks are required to issue it.

Banks should always verify each recipient’s tax status and keep supporting documentation on file.

Some common exempt recipients include:

• Corporations
• Tax-exempt organizations
• Individual retirement arrangements (IRAs)
• Health savings accounts (HSAs)
• Archer medical savings accounts (MSAs)
• Medicare Advantage MSAs
• Federal government entities
• State and local government entities
• Certain foreign recipients subject to separate U.S. withholding or information-reporting rules

For U.S. persons, banks generally must use Form W-9 and other account documentation to establish the recipient’s identity and, when applicable, exempt payee status. Foreign persons generally provide the appropriate Form W-8 instead.

Form 1099-INT Deadlines for Tax Year 2026

Knowing when banks are required to send Form 1099-INT to the IRS is only one part of the process. Banks also need to furnish those returns to the recipient. Here are the Form 1099-INT deadline 2027 dates:

January 31 and February 28, 2027, fall on a Sunday, so the Form 1099-INT recipient deadline moves to the next working day.

Paper filing vs eFiling Form 1099-INT

Electronically file Form 1099-INT when eFile requirements apply. The IRS requires eFile when a bank files 10 or more information returns in total across all form types combined. Filers filing under the 10-return threshold may paper-file, but the IRS encourages eFile for all filers.

Form 1099-INT Checklist For Staying Compliant

Before filing, confirm the following:

1. Determine the reportable interest for each recipient and payer
2. Verify each customer’s legal name and TIN using a TIN match tool
3. Identify if there are any exempt and foreign recipients. They are subject to different reporting rules
4. Classify taxable, Treasury, and tax-exempt interest and report in the correct boxes
5. Reported any federal income tax withheld in Box 4
6. Reconcile Form 1099-INT totals with the interest records
7. Retained IRS acceptance records and recipient-delivery documentation

Conclusion

The interest reporting requirements for Form 1099-INT remain mostly unchanged for tax year 2026. The Form 1099-INT minimum amount is still $10. With the $2,000 threshold applying only to certain payments governed by IRC §6041 and does not replace the $10 threshold for interest reportable under IRC §6049.

Correctly reporting reportable interest payments to the IRS can help banks avoid mismatches, corrections, and potential compliance issues.

FAQs

1. Do banks file Form 1099-INT for interest under $10?

Generally no. However, if the bank applied backup withholding or withheld and paid foreign tax on the recipient’s interest, Form 1099-INT must still be filed, even if the interest earned was under $10.

2. What if a customer has several accounts with the same bank?

If a customer has more than one account, the bank may need to look at all the interest earned under the same taxpayer ID. However, in some cases, the bank can report interest separately for each account instead of combining them. The key is to follow IRS rules for reporting and use the correct method for each situation.

3. Is interest reportable when it stays in the account?

Generally yes. Interest credited to a recipient’s account and available without restriction is reportable in the year it becomes available, even if it was not withdrawn.

4. Does every account-opening bonus require Form 1099-INT?

The bank must determine whether the bonus qualifies as interest or another type of payment. If it qualifies as interest, it belongs in Box 1.

5. How should a bank correct an inaccurate Form 1099-INT?

File a corrected Form 1099-INT with the IRS  as soon as the error is found and furnish the updated copy to the recipient.