Updated September 30, 2026. Quick answer: Box 8 of Form 1099-INT is tax-exempt interest, such as interest on state and local government bonds. Box 9 is the part from specified private activity bonds, and it is also counted in Box 8.
S corporation return (Form 1120-S) for 2025, read line by line: Form 1120-S Schedule K lines 17 and 18, Form 1120-S Schedule L and Form 1120-S Schedule M-1.
Partnership return (Form 1065) for 2025, read line by line: Form 1065 Schedule K lines 5 to 11.
Schedule A and Schedule B (Form 1040) for 2025, read line by line: Schedule B lines 1 to 4.
Form 1040 for 2025, read line by line: Form 1040 lines 2a and 2b.
Read box by box from the IRS form text: Form 1099-OID boxes explained, Form 1099-OID box 2 and Form 1099-OID box 10.
The recipient copy of Form 1099-NEC or 1099-MISC, read box by box: 1099-MISC box 8.
The IRS form or worksheet behind this, read line by line: Schedule B instructions.
Whether your state taxes the dividends and interest is answered state by state: state tax on dividends and interest, by state.
Box 8
The instruction reads: “Enter tax-exempt interest that is not OID of $10 or more that is credited or paid to the person’s account if that interest is paid on obligations issued by a state, the District of Columbia, a U.S. territory, an Indian tribal government, or their political subdivisions, or qualified volunteer fire departments to finance eligible expenditures.” The 1099-INT instructions read here are the January 2024 revision (combined with Form 1099-OID), which is the edition irs.gov shows as current for those forms. Those are instructions to the payer that files the form, so they show what a box is meant to hold, not what tax follows from it. Reporting interest here does not tell you how any tax applies to it.
Box 9
The Box 9 instruction is “Enter interest of $10 or more from specified private activity bonds.” and Box 8 says “Include specified private activity bond interest in box 9 and in the total for box 8.” The definition given is, generally, “any private activity bond defined in section 141 and issued after August 7, 1986”. The instructions also send the payer to the instructions for Form 6251, the alternative minimum tax form.
Fund dividends are elsewhere
Interest from a bond fund is not reported here. The instruction says “Any exempt-interest dividends from a mutual fund or other RIC are reported on Form 1099-DIV.” See the 1099-DIV Box 12 page.
Common mistakes
- Assuming Box 9 is extra. It is included in the Box 8 total.
- Looking for a bond fund’s tax-exempt income here. It is on Form 1099-DIV.
- Reading Box 8 as income that never touches any part of a return. These instructions only describe reporting.
Related: 1099-INT Box 1 Interest Income: What Counts, and 1099-DIV Box 12 and 13: Exempt-Interest Dividends.
Every box in one place: the 1099-DIV, 1099-INT and 1099-B boxes table. If your withdrawal came from an IRA or 401(k), see the Form 1099-R Box 7 codes.
Sources
- IRS, Instructions for Form 1099-DIV (Rev. January 2024): irs.gov/pub/irs-pdf/i1099div.pdf
- IRS, Instructions for Forms 1099-INT and 1099-OID (Rev. January 2024): irs.gov/pub/irs-pdf/i1099int.pdf
- IRS, Instructions for Form 1099-B (2026): irs.gov/instructions/i1099b
Source: the IRS instructions for the filer of each form, read at irs.gov on September 30, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.