Updated October 17, 2026. Quick answer: Box 1 of Form 1099-OID shows the original issue discount, or OID, on a taxable obligation for the part of the year you owned it. It concerns holders of bonds, notes, CDs and similar debt that was issued for less than its redemption value. The IRS tells you to report it as interest income, which for most people means Schedule B (Form 1040) and then Form 1040.
Related reading on this site: IRS Publication 1212.
What box 1 reports
The recipient instructions on the form describe the box in one sentence: “Shows the OID on a taxable obligation for the part of the year you owned it.” The form defines the term itself: “Original issue discount (OID) is the excess of an obligation’s stated redemption price at maturity over its issue price”.
For the other boxes on the same form, see the Form 1099-OID boxes guide.
What kinds of obligations can have OID
The form lists the obligations it has in mind: “Obligations that may have OID include a bond, debenture, note, certificate, or other evidence of indebtedness having a term of more than 1 year.” It also gives bank products as examples: “the OID rules may apply to certificates of deposit (CDs), time deposits, bonus savings plans”. The same paragraph adds: “In addition, the OID rules apply to Treasury inflation-protected securities.”
That last sentence matters for how the boxes divide up. Treasury obligations have their own box, covered on the page for Form 1099-OID box 8, and the filer instructions say that box 1 is not meant to include them: “Do not include the amount reported in box 8.”
Why the income is taxed before you are paid
OID is taxed as it builds, not when the obligation matures. The form says: “OID on a taxable obligation is taxable as interest over the life of the obligation.” “If you are the holder of a taxable OID obligation, you must generally include an amount of OID in your gross income each year you hold the obligation.”
Publication 550 states the consequence plainly: “You must report all taxable OID even if you do not receive a Form 1099-OID.”
Where box 1 goes on your return
The form tells you to treat the box as interest: “Report the amount in box 1 as interest income on your income tax return.” Publication 550 repeats it: “In most cases, you must report the entire amount in Form 1099-OID, boxes 1, 2, and 8 as interest income.”
For the mechanics, the publication says “Generally, you report all your taxable interest income on Form 1040 or 1040-SR, line 2b.” and that “In Part I, line 1, list each payer’s name and the amount received from each.” That list is Schedule B (Form 1040), Part I, and the total flows to Form 1040. Interest that arrives on a Form 1099-INT instead is covered on the page for Form 1099-INT box 1.
When the box 1 figure may not be the right figure
The copy you keep carries an asterisk on this box and a warning: “This may not be the correct figure to report on your income tax return.” The instructions explain when: “However, depending on the type of debt instrument, the issue or acquisition date, and other factors” (“for example, if you paid acquisition or bond premium, or the obligation is a stripped bond or coupon”), “you may have to figure the correct amount of OID to report on your return.” “See Pub. 1212 for details on how to figure the correct OID.”
Publication 550 names the same two situations: “You may need to refigure the OID shown in Form 1099-OID, box 1 or box 8 if either of the following apply.” “You bought the debt instrument after its original issue and paid a premium or an acquisition premium.” The second is a stripped bond or coupon. Acquisition premium has its own box, explained on the page for Form 1099-OID box 6.
If you end up reporting less than the form shows, the publication gives the Schedule B method: “include the full amount of OID shown on your Form 1099-OID or other statement on Schedule B (Form 1040), Part I, line 1.” “Identify the amount as” “OID Adjustment” and subtract it from the subtotal.
When no form arrives, and when the account is not only yours
A missing form does not remove the income. Publication 550 says: “If you had OID for the year but did not receive a Form 1099-OID, you may have to figure the correct amount of OID to report on your return.”
If the form lists amounts that belong to someone else, the form explains the term for you: “you are considered a nominee recipient.” The form describes the situation as a record holder receiving a form that shows amounts belonging to another person, and the nominee rules are separate from box 1 itself. Publication 550 sends you to its nominee discussion: “If you receive a Form 1099-OID that includes amounts belonging to another person, see Nominee distributions, later.”
Edition and box numbers
Form 1099-OID has one edition on file for this page. The form is marked “(Rev. January 2024)”, and that is the edition the IRS website served as the current form on October 17, 2026. No other edition is compared here, so there is no difference between editions to report. Publication 550 for 2025 returns is used for where amounts go on the return.
Look at the line that reads “For calendar year” on the copy you received and confirm it shows the tax year you are filing before you rely on any box description on this page. The box numbers above are the numbers printed on the form itself.
Common mistakes
- Treating box 1 as final without checking the circumstances. The form warns: “This may not be the correct figure to report on your income tax return.”
- Skipping the income because no cash arrived. The form says you “must generally include an amount of OID in your gross income each year you hold the obligation.”
- Adding box 8 into box 1. The filer instructions say for box 1: “Do not include the amount reported in box 8.”
Related: Schedule B (Form 1040), Form 1099-INT box 1, Form 1040, and savings bond and Treasury interest.
Sources
- Form 1099-OID (Rev. January 2024) with Instructions for Recipient: https://www.irs.gov/pub/irs-pdf/f1099oid.pdf
- Instructions for Forms 1099-INT and 1099-OID (Rev. January 2024): https://www.irs.gov/pub/irs-pdf/i1099int.pdf
- Publication 550, Investment Income and Expenses (for 2025 returns): https://www.irs.gov/pub/irs-pdf/p550.pdf
Read from the IRS documents linked above on October 17, 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.