Updated October 24, 2026. Quick answer: Tax Topic 403 is the IRS page on interest received. It says most interest is taxable income in the year it becomes available to you, that some interest may be tax-exempt, and that all of it must be reported even without a Form 1099-INT or Form 1099-OID.
Quick reference
| Item | What the IRS topic says |
|---|---|
| General rule | “Most interest that you receive or that is credited to an account that you can withdraw from without penalty is taxable income in the year it becomes available to you.” |
| Reporting | “You must report all taxable and tax-exempt interest on your federal income tax return, even if you don’t receive a Form 1099-INT or Form 1099-OID.” |
| Treasury interest | “This interest is subject to federal income tax but is exempt from all state and local income taxes.” |
| Savings bond interest | “You can elect to include the interest in income each year” |
| Tax-exempt bond interest | “Reporting tax-exempt interest received during the tax year is an information-reporting requirement only and doesn’t convert tax-exempt interest into taxable interest.” |
Taxable interest and the forms that report it
The topic starts with timing. The IRS topic says “Most interest that you receive or that is credited to an account that you can withdraw from without penalty is taxable income in the year it becomes available to you.” It adds “However, some interest you receive may be tax-exempt.”
On forms, it says “If you received payments of interest and/or tax-exempt interest of $10 or more, you should receive Copy B of Form 1099-INT or Form 1099-OID reporting those payments.” The reporting duty does not depend on getting one: “You must report all taxable and tax-exempt interest on your federal income tax return, even if you don’t receive a Form 1099-INT or Form 1099-OID.” See 1099-INT box 1 for the main interest box.
The topic also says “You must give the payer of interest income your correct taxpayer identification number; otherwise, you may be subject to a penalty and backup withholding.” It points to Topic no. 307 for backup withholding.
Examples the IRS lists
Under taxable interest, the topic lists “Interest on bank accounts, money market accounts, certificates of deposit, corporate bonds and deposited insurance dividends”. For federal debt it says “This interest is subject to federal income tax but is exempt from all state and local income taxes.”
Savings bonds have a timing rule. The topic says “You can elect to include the interest in income each year, but you generally won’t include interest on Series EE and Series I U.S. savings bonds until the earlier of when the bonds mature or when they’re redeemed or disposed of.” See 1099-INT box 3.
On refunds it says “Federal, state and local tax authorities can pay interest on refunds that are delayed beyond normal return processing and the interest may be reported to you on Form 1099-INT.”
Excludable interest, discount instruments and nominees
For education savings bonds, the topic says interest “may be excluded from income when used to pay for qualified higher educational expenses during the year and you meet the other requirements for the Educational Savings Bond Program.” The form it names is Form 8815, covered on our Form 8815 page. On state and local bonds it says “Interest on some bonds used to finance government operations and issued by a state, the District of Columbia, or a U.S. territory is reportable but not taxable at the federal level.”
For discounted debt, the topic says “part of the original issue discount may have to be included in income each year as interest, even if no payment is received during the year.” See Form 1099-OID boxes.
The topic also covers a form that lists someone else’s money. It says “In this case, the IRS considers you a nominee recipient.” Last, it says “If you receive taxable interest, you may have to pay estimated tax on the additional income.”
Where this comes from
This page describes the IRS page titled Topic no. 403, Interest received, as served on irs.gov on October 24, 2026. The IRS page shows that it was last reviewed or updated on 07 Oct 2026. The IRS can change a topic after we read it, and the IRS page controls. General information, not tax or legal advice.
Common mistakes
- Skipping interest because no form arrived. The topic says to report it “even if you don’t receive a Form 1099-INT or Form 1099-OID”
- Leaving out tax-exempt interest. The topic says you “must report all taxable and tax-exempt interest”
- Assuming reported tax-exempt interest becomes taxable. The topic says reporting it “doesn’t convert tax-exempt interest into taxable interest”
- Assuming Treasury interest is free of all tax. The topic says it “is subject to federal income tax”
- Waiting for a payment to count discount interest. The topic says it may be included “even if no payment is received during the year”
Related: IRS tax topics by number, 1099-INT box 1: interest income, 1099-INT box 8: tax-exempt interest, 1099-INT box 3: savings bond and Treasury interest, Schedule B lines 1 to 4: interest income, Form 8815, and Form 1099-OID boxes explained.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Talk to an advisor about interest income planning
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore advisor help with taxable interest
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. 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 may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- IRS, Topic no. 403, Interest received (irs.gov): https://www.irs.gov/taxtopics/tc403
- IRS, Tax topics index (irs.gov): https://www.irs.gov/taxtopics
Read from the IRS pages linked above on October 24, 2026. General information, not tax or legal advice. The IRS topic page and the instructions for your own form control, and your own facts decide the outcome.