Updated October 17, 2026. Quick answer: Box 10 of Form 1099-OID shows the premium amortization allocable to the interest payments on a covered security you bought at a premium. It concerns buyers who paid more than the amount payable on the bond. When the box has an amount, the form sends you to the Schedule B instructions.
Related reading on this site: IRS Publication 1212.
What box 10 reports
The recipient instructions say: “For a taxable covered security, including a Treasury inflation-protected security, shows the amount of premium amortization allocable to the interest payment(s)”, “unless you notified the payer in writing” “that you did not want to amortize bond premium under section 171.”
So the box is a reduction tied to interest, reported by the payer unless you opted out in writing. It differs from Form 1099-OID box 6, which relates to OID rather than to interest payments. The other boxes on the form are in the Form 1099-OID boxes guide.
What a bond premium is
Publication 550 defines the term: “Bond premium is the amount by which your basis in the bond right after you get it is more than the total of all amounts payable on the bond after you get it (other than payments of qualified stated interest)”. It gives a small example: “For example, a bond with a maturity value of $1,000 generally would have a $50 premium if you buy it for $1,050.”
The publication also explains where the premium sits for tax purposes: “If you pay a premium to buy a bond, the premium is part of your basis in the bond.”
Amortizing the premium
For a taxable bond the choice is yours. Publication 550 says: “If the bond yields taxable interest, you can choose to amortize the premium.” “This generally means that each year, over the life of the bond, you use a part of the premium to reduce the amount of interest includible in your income.” “If you make this choice, you must reduce your basis in the bond by the amortization for the year.”
The choice is lasting: “This choice is binding for the year you make it and for later tax years.” “It applies to all taxable bonds you own in the year you make the choice and also to those you acquire in later years.” For tax-exempt bonds the publication is firmer: “If the bond yields tax-exempt interest, you must amortize the premium.”
Net reporting versus a filled-in box 10
Whether the payer used box 10 or netted the premium into interest decides what you do. The form says: “If an amount is not reported in this box for a taxable covered security acquired at a premium and the payer is reporting premium amortization, the payer has reported a net amount of interest in box 2.”
The filer instructions agree: “If you are required to report bond premium amortization and you reported a net amount of interest in box 2, leave this box blank.” Publication 550 tells you to check, because “you may receive a Form 1099-INT or Form 1099-OID.” “See the instructions on those forms to determine if the amounts of interest reported to you have been reduced by amortizable bond premium for the period.” The Form 1099-INT side of this question is on the Form 1099-INT market discount and bond premium page.
Reporting the amortization on your return
When box 10 has an amount, the form says: “If an amount is reported in this box, see the Instructions for Schedule B (Form 1040).”
Publication 550 describes the entries for a taxable bond: “Subtract the bond premium amortization from your interest income from these bonds.” “Report the bond’s interest on Schedule B (Form 1040), line 1.” “Below this subtotal, enter the amortizable bond premium allocable to the interest payments for the year and label this amount” “ABP Adjustment”. The page for Schedule B (Form 1040) shows where those lines sit.
If the amortization is larger than the interest, the form points to a rule: “If the amount in this box is greater than the amount of interest paid on the covered security, see Regulations section 1.171-2(a)(4).”
Tax-exempt obligations with box 11
The form describes one more case: “If there is an amount in both boxes 10 and 11, for a tax-exempt obligation that is a covered security acquired on or after January 1, 2017, and issued with OID, the amount in box 10 shows the amount of premium amortization for the year that reduces the amount of your tax-exempt interest for the year.” Publication 550 adds: “This amortized amount is not deductible in determining taxable income.”
Tax-exempt interest from the same family of forms is discussed on Form 1099-INT box 8 for the Form 1099-INT box.
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
- Skipping the Schedule B step. The form says “If an amount is reported in this box, see the Instructions for Schedule B (Form 1040).”
- Forgetting the choice carries forward. Publication 550 says “This choice is binding for the year you make it and for later tax years.”
- Subtracting the premium again after the payer netted it. The form says the payer “has reported a net amount of interest in box 2.”
Related: market discount and bond premium, Schedule B (Form 1040), Form 1099-INT box 8, and Form 1040.
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.