Updated September 30, 2026. Quick answer: Box 1 of Form 1099-INT is interest a bank, credit union or other payer reports, other than interest on U.S. Savings Bonds and Treasury obligations, which goes in Box 3. Money market fund dividends are not here at all.
Schedule A and Schedule B (Form 1040) for 2025, read line by line: Schedule A lines 9 and 10 and 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 box 1, Form 1099-OID box 6 and Form 1099-OID box 10.
The recipient copy of Form 1099-G or 1099-K, read box by box: 1099-G box 1, 1099-K boxes 1c and 1d and 1099-K box 4 and boxes 5a to 5l.
The recipient copy of Form 1099-NEC or 1099-MISC, read box by box: 1099-NEC box 1a, 1099-NEC boxes 1b to 1d and 1099-NEC box 2.
The shareholder’s Schedule K-1 (Form 1120-S), boxes 13 to 19: Schedule K-1 box 17 codes A, B and U.
The shareholder’s Schedule K-1 (Form 1120-S), read box by box: Schedule K-1 boxes 4 to 6.
The partner’s Schedule K-1 (Form 1065), read box by box: Schedule K-1 box 13, Schedule K-1 box 16 and Schedule K-1 box 18.
The partner’s Schedule K-1 (Form 1065), read box by box: Schedule K-1 box 5.
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.
What the instruction says
The IRS instruction to the payer begins: “Enter taxable interest not included in box 3.” It lists the payers, saying to “Include amounts of $10 or more, whether or not designated as interest, that are paid or credited to the person’s account by savings and loan associations, mutual savings banks not having capital stock represented by shares, building and loan associations, cooperative banks, homestead associations, credit unions, or similar organizations.” 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. The $10 figure is a threshold for the payer’s filing duty; these instructions do not say interest below it is tax-free, and this page does not decide that.
Interest paid in a business
A separate threshold applies to other payers. The instruction includes “interest of $600 or more paid in the course of your trade or business not meeting the above criteria”.
What stays out of Box 1
The instructions say “Do not include in box 1 interest on tax-free covenant bonds or dividends from money market funds (which are reportable on Form 1099-DIV).” and “Do not include any description in box 1.” Savings bond and Treasury interest belongs in Box 3, and tax-exempt interest in Box 8.
Box 1 and the early withdrawal penalty
If a penalty applies, Box 1 is not reduced. The Box 2 instruction says “Do not reduce the amount reported in box 1 by the amount of the forfeiture.” See the Box 2 page.
Common mistakes
- Looking for Treasury bill interest in Box 1. It goes in Box 3.
- Expecting money market fund income on Form 1099-INT. The instructions send it to Form 1099-DIV.
- Assuming a smaller number in Box 1 means a penalty was already netted. The instruction says not to reduce Box 1 for it.
Related: 1099-INT Box 2 Early Withdrawal Penalty on a CD, 1099-INT Box 3: Savings Bond and Treasury Interest, 1099-INT Box 4 to 7: Withholding, Expenses and Foreign Tax, 1099-INT Box 10 to 13: Market Discount and Bond Premium, and the T-bill versus CD after-tax calculator.
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
Optional next step
Want help with this decision?
Ask an adviser how this choice fits your broader retirement and financial plan.
- No fee to request a match
- No obligation to hire
Expect questions about your situation, your name, email and phone, and phone verification by text. A match is not guaranteed.
The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
Opens here. Nothing loads and nothing reaches Kapitalwise until you press the button.
How our partner relationships workSource: 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.