1099-INT Reporting: The $10 Interest Threshold

A bank, credit union, brokerage or other payer generally must issue Form 1099-INT when it pays you at least $10 of interest during a calendar year. Below $10 the payer usually sends no form, but the interest is still taxable income and still belongs on your federal return. The $10 figure is a reporting trigger for the payer, not a tax exemption for you.

Key takeaways

• The $10 threshold covers ordinary deposit and bond interest, U.S. Treasury interest and tax-exempt municipal bond interest reported on Form 1099-INT.
• Interest under $10 with no form is still reportable: the IRS requires you to include all taxable and tax-exempt interest on your return.
• A form must be issued at any amount when the payer applied backup withholding or paid foreign tax on the interest.
• Certain other interest a business pays, such as interest on a delayed tax refund or interest received with damages, used a $600 threshold; the One Big Beautiful Bill Act raised it to a base of $2,000 for payments made after December 31, 2025, although some IRS pages still show $600.
• At a 4% yield, a balance of about $250 held all year earns $10; at 0.01%, it takes about $100,000.

Who the $10 rule applies to

The rule sits in the IRS Instructions for Forms 1099-INT and 1099-OID. A payer must file Form 1099-INT for each person who received at least $10 of interest reportable in box 1 (taxable interest), box 3 (interest on U.S. Savings Bonds and Treasury obligations) or box 8 (tax-exempt interest). The same instructions list the types of payers and payments this covers: interest on bank deposits, interest and dividends on credit union and savings association accounts (even when the institution calls them dividends), interest on publicly offered or registered bonds and notes, and accumulated dividends left with a life insurance company.

The payer files a copy with the IRS and must furnish a statement to you. For most information returns, that statement is due by January 31 of the following year, as the IRS notes in Publication 1099 (2026), General Instructions for Certain Information Returns; a due date that falls on a weekend moves to the next business day. For interest paid in 2026, January 31, 2027 is a Sunday, so statements are due by Monday, February 1, 2027. Brokerages that send a consolidated statement including Form 1099-B have until February 15, which Publication 1099 applies to the whole consolidated statement; for 2026 statements that date falls on Washington's Birthday, a federal holiday, so the deadline moves to Tuesday, February 16, 2027.

Interest counts as paid when it is credited to your account and available for you to withdraw, according to the 1099-INT instructions. Interest credited on December 31 belongs to that year, even if you don't see it on a statement until January.

Recipients and interest the rule does not cover

The instructions exempt payers from issuing Form 1099-INT to certain recipients, including corporations, tax-exempt organizations, IRAs, health savings accounts and Archer MSAs. Interest earned inside a traditional IRA is tax-deferred and is not reported on Form 1099-INT; withdrawals from the IRA are reported on a different form. Interest on an obligation issued by an individual, such as a private loan between family members, is also excluded from 1099-INT reporting, although the lender may still owe tax on it.

Thresholds that differ from $10

Not every interest-related amount follows the $10 rule. The table summarizes the main cases, based on the 1099-INT instructions, Publication 1099 and IRS Publication 550, Investment Income and Expenses.

The fourth row changed recently. Interest that falls outside the ordinary deposit-and-bond category is reported under the general business-payment rule in section 6041 of the tax code. The One Big Beautiful Bill Act raised that section's threshold to a base of $2,000 for payments made after December 31, 2025, with inflation adjustments after 2026, as described in the Treasury proposed regulations published in April 2026, which name interest among the payments covered. The statutory change applies to 2026 payments whether or not the regulations are finalized.

Publication 1099 (2026) likewise states that the minimum threshold for certain information returns rose from $600 to $2,000 for tax years beginning after 2025. The 1099-INT instructions (Rev. 01/2024) and Tax Topic 403 still show $600, so payers should check for updated instructions before filing 2026 forms. The $10 rule for ordinary interest was not part of this change.

Gifts and bonuses for opening an account

Publication 550 explains that noncash gifts or services received for opening or funding a savings account may be reported as interest. The value must be reported when it exceeds $10 for deposits under $5,000, or $20 for deposits of $5,000 or more. In the publication's own example, an $800 deposit earning $20 of interest plus a gift valued at $15 produces a Form 1099-INT showing $35.

Cash sign-up bonuses are handled in different ways by different banks; some report them as interest and others on another form, so the year-end tax documents from the bank are the place to confirm how a bonus was classified.

What the missing form does not change

IRS Tax Topic 403, Interest Received states plainly that you must report all taxable and tax-exempt interest on your federal return, even without a Form 1099-INT or 1099-OID. The threshold only relieves the payer of a filing duty. Taxable interest goes on the taxable interest line of Form 1040, and tax-exempt interest goes on its own line; tax-exempt interest is generally not taxed, but it is still reported because it can affect other calculations, such as how much of a Social Security benefit is taxable.

Two practical consequences follow. First, the IRS has no third-party copy of interest under $10, so the only record is your own account statement or year-end summary. Second, the absence of a form is not evidence that no interest was paid. A small credit union share account, a checking account with a token rate, a brokerage cash sweep or a closed account can all pay a few dollars without generating a form.

How much balance it takes to reach $10

Whether an account produces a form depends mostly on its rate and average balance. For a balance held for the full year, the approximate balance needed is:

Balance needed = $10 / APY

APY = annual percentage yield, written as a decimal (4% = 0.04)

This treats the stated APY as the full-year return on a steady balance. Balances that change during the year, rates that reset, or accounts opened partway through will earn different amounts.

The table shows why the threshold catches more people when savings rates are high. At a near-zero rate on a traditional savings or checking account, most households never reach $10. At rates common on high-yield online savings accounts, a few hundred dollars kept all year is enough.

Illustrative example: a return with forms and without them

Illustrative example. A taxpayer has three interest-bearing accounts during the year:

• An online savings account that pays $412.37 of interest. The bank issues Form 1099-INT.
• A credit union share account that pays $7.80. No form is required, and none arrives.
• A brokerage cash sweep that pays $9.15. No 1099-INT is required for this amount.

Taxable interest to report is $412.37 + $7.80 + $9.15 = $429.32. Only $412.37 appears on a form the IRS receives; the other $16.95 comes from the account statements. In a hypothetical 22% federal bracket, total tax on the interest is about $94.45, and the portion attributable to the two small accounts is about $3.73.

The lesson matches the numbers: leaving off sub-$10 interest usually understates tax by a few dollars, not a large sum. The reason to include it anyway is that the rule is unconditional, and collecting statements for every account is also how you catch a larger amount you didn't expect, such as a promotional bonus or interest from an account you closed early in the year.

Reading the form: what the payer shows and what you report

Form 1099-INT shows what the payer paid or credited. What you report can differ, and a few boxes commonly cause mismatches.

• Box 2, early withdrawal penalty. The payer reports the full interest in box 1 and the penalty separately in box 2, without netting them. Illustrative example: if a CD shows $180 in box 1 and $45 in box 2, you report $180 as interest and claim the $45 penalty as an adjustment to income on Schedule 1, so the net effect on income is $135.
• Box 3, Treasury and savings bond interest. This interest is subject to federal income tax but exempt from state and local income tax, so it is kept separate from box 1.
• Box 11, bond premium. A payer may report gross interest with the premium amortization in a separate box, or report a net amount; the instructions allow either, so check which approach the form uses before making any adjustment yourself.
• Joint and nominee accounts. The form lists one taxpayer identification number. If part of the interest belongs to someone other than a spouse, Tax Topic 403 explains that the person named on the form may need to issue a nominee 1099-INT to the actual owner.

For U.S. Savings Bonds, Publication 550 notes that the payer that redeems a bond must issue Form 1099-INT if the interest part of the payment is $10 or more. Owners who elected to report savings bond interest each year may already have reported part of that amount, which is a case where your return and the form can legitimately differ.

When a small amount still produces a form

Some payers issue Form 1099-INT for amounts under $10 as a matter of practice; Publication 1099 notes that filing forms below the minimum is permitted. A form is also required at any amount if the payer applied backup withholding. That is the 24% withholding that applies when a recipient doesn't provide or certify a correct taxpayer identification number, or after the IRS notifies the payer of underreported interest or dividends. The same is true when foreign tax was paid on the interest. In each case the amount on the form is reportable exactly as it would be above $10.

If you have more than $1,500 of taxable interest or ordinary dividends, the IRS requires you to file Schedule B (Form 1040) and list each payer, including those that didn't send a form. Schedule B is also required in several other situations, such as having a financial interest in a foreign account, regardless of the amount.

A pre-filing checklist for interest income

1. List every account that could have paid interest during the year, including checking, credit union shares, brokerage cash, CDs, Treasury holdings and accounts you closed, plus any interest paid on a delayed federal, state or local tax refund.
2. Collect each Form 1099-INT, 1099-OID and 1099-DIV, and each December or year-end statement for accounts without a form.
3. Wait for consolidated brokerage statements, which can arrive in mid-February, before treating your list as complete.
4. Add the sub-$10 amounts from those statements to the amounts shown on forms.
5. Separate Treasury interest (box 3) and tax-exempt interest (box 8) from ordinary taxable interest.
6. Note any early withdrawal penalties in box 2 so they are claimed separately rather than subtracted from interest.
7. If a form shows an amount that doesn't match your records, ask the payer for a corrected form marked "Corrected" before you file.
8. If total taxable interest or ordinary dividends exceed $1,500, prepare Schedule B.

This article is general educational information about federal reporting rules as of September 2026, not tax advice for any individual situation. State rules and individual circumstances vary; a qualified tax professional can address a specific return.

Sources

• IRS, Instructions for Forms 1099-INT and 1099-OID (Rev. 01/2024)
• IRS, Publication 1099 (2026), General Instructions for Certain Information Returns
• IRS, Publication 550, Investment Income and Expenses
• Federal Register, Increase in Threshold for Requiring Information Reporting With Respect to Certain Payees (April 17, 2026)
• IRS, Tax Topic 403, Interest Received
• IRS, About Schedule B (Form 1040), Interest and Ordinary Dividends