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File State Income Tax

Efile State Income Tax1040ez 2012 FormIncome Tax Deductions 2012Free State Tax Return E-fileH&r Block Free EditionStudent Tax InformationFile State Taxes Only OnlineFree Federal And State E FileAmended Federal Tax Return 2011Filing State Tax FreeFreefile Irs GovHow Do I File An Amended ReturnIrs Estimated Tax Forms 2011E File 2012 TaxesTax ReturnVolunteer Income Tax Assistance ProgramFile 1040x Online FreeAmend 2011 Tax Return OnlineHow To File An Amended Return For 2012Filing State Taxes For FreeTurbotax 2011How To Fill Out The 1040x Form1040ez InstructionsTurbotax 2010 Software2012 State Tax FormTax VolunteerHr Block Tax ReturnFiling Tax ExtensionFree State TaxesHr Block Free TaxesIrs E File ExtensionWheres My Amended ReturnFree E File 2010File An Amended Tax ReturnFree Turbo Tax Filing 2012Free 2010 State Tax FilingTaxslayer 2012Aarp Tax AideState Income Tax By StateFiling 2012 Tax Return Late

File State Income Tax

File state income tax Part Two -   Income The eight chapters in this part discuss many kinds of income. File state income tax They explain which income is and is not taxed. File state income tax See Part Three for information on gains and losses you report on Form 8949 and Schedule D (Form 1040) and for information on selling your home. File state income tax Table of Contents 5. File state income tax   Wages, Salaries, and Other EarningsReminder Introduction Useful Items - You may want to see: Employee CompensationBabysitting. File state income tax Miscellaneous Compensation Fringe Benefits Retirement Plan Contributions Stock Options Restricted Property Special Rules for Certain EmployeesClergy Members of Religious Orders Foreign Employer Military Volunteers Sickness and Injury BenefitsDisability Pensions Long-Term Care Insurance Contracts Workers' Compensation Other Sickness and Injury Benefits 6. File state income tax   Tip IncomeIntroduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. File state income tax Reporting Tips to Your EmployerElectronic tip statement. File state income tax Final report. File state income tax Reporting Tips on Your Tax Return Allocated Tips 7. File state income tax   Interest IncomeReminder Introduction Useful Items - You may want to see: General InformationSSN for joint account. File state income tax Custodian account for your child. File state income tax Penalty for failure to supply SSN. File state income tax Reporting backup withholding. File state income tax Savings account with parent as trustee. File state income tax Interest not reported on Form 1099-INT. File state income tax Nominees. File state income tax Incorrect amount. File state income tax Information reporting requirement. File state income tax Taxable InterestInterest subject to penalty for early withdrawal. File state income tax Money borrowed to invest in certificate of deposit. File state income tax U. File state income tax S. File state income tax Savings Bonds Education Savings Bond Program U. File state income tax S. File state income tax Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Original Issue Discount (OID) When To Report Interest IncomeConstructive receipt. File state income tax How To Report Interest IncomeSchedule B (Form 1040A or 1040). File state income tax Reporting tax-exempt interest. File state income tax U. File state income tax S. File state income tax savings bond interest previously reported. File state income tax 8. File state income tax   Dividends and Other DistributionsReminder Introduction Useful Items - You may want to see: General InformationDividends not reported on Form 1099-DIV. File state income tax Reporting tax withheld. File state income tax Nominees. File state income tax Ordinary DividendsQualified Dividends Dividends Used to Buy More Stock Money Market Funds Capital Gain DistributionsBasis adjustment. File state income tax Nondividend DistributionsLiquidating Distributions Distributions of Stock and Stock Rights Other DistributionsInformation reporting requirement. File state income tax Alternative minimum tax treatment. File state income tax How To Report Dividend IncomeInvestment interest deducted. File state income tax 9. File state income tax   Rental Income and ExpensesIntroduction Useful Items - You may want to see: Rental Income Rental ExpensesVacant while listed for sale. File state income tax Repairs and Improvements Other Expenses Property Changed to Rental Use Renting Part of Property Not Rented for Profit Personal Use of Dwelling Unit (Including Vacation Home)Example. File state income tax Dividing Expenses Dwelling Unit Used as a Home Reporting Income and Deductions DepreciationChanging your accounting method to deduct unclaimed depreciation. File state income tax Limits on Rental LossesAt-Risk Rules Passive Activity Limits How To Report Rental Income and ExpensesSchedule E (Form 1040) 10. File state income tax   Retirement Plans, Pensions, and AnnuitiesWhat's New Reminder IntroductionThe General Rule. File state income tax Individual retirement arrangements (IRAs). File state income tax Civil service retirement benefits. File state income tax Useful Items - You may want to see: General InformationIn-plan rollovers to designated Roth accounts. File state income tax How To Report Cost (Investment in the Contract) Taxation of Periodic PaymentsExclusion limited to cost. File state income tax Exclusion not limited to cost. File state income tax Simplified Method Taxation of Nonperiodic PaymentsLump-Sum Distributions RolloversIn-plan rollovers to designated Roth accounts. File state income tax Special Additional TaxesTax on Early Distributions Tax on Excess Accumulation Survivors and Beneficiaries 11. File state income tax   Social Security and Equivalent Railroad Retirement BenefitsIntroduction Useful Items - You may want to see: Are Any of Your Benefits Taxable? How To Report Your BenefitsHow Much Is Taxable? Examples Deductions Related to Your BenefitsRepayments More Than Gross Benefits 12. File state income tax   Other IncomeIntroduction Useful Items - You may want to see: Bartering Canceled DebtsInterest included in canceled debt. File state income tax Exceptions Host or Hostess Life Insurance ProceedsSurviving spouse. File state income tax Endowment Contract Proceeds Accelerated Death Benefits Public Safety Officer Killed in the Line of Duty Partnership Income S Corporation Income RecoveriesItemized Deduction Recoveries Rents from Personal Property RepaymentsMethod 1. File state income tax Method 2. File state income tax RoyaltiesDepletion. File state income tax Coal and iron ore. File state income tax Sale of property interest. File state income tax Part of future production sold. File state income tax Unemployment BenefitsTypes of unemployment compensation. File state income tax Governmental program. File state income tax Repayment of unemployment compensation. File state income tax Tax withholding. File state income tax Repayment of benefits. File state income tax Welfare and Other Public Assistance Benefits Other IncomeEmotional distress. File state income tax Deduction for costs involved in unlawful discrimination suits. File state income tax Energy conservation measure. File state income tax Dwelling unit. File state income tax Current income required to be distributed. File state income tax Current income not required to be distributed. File state income tax How to report. File state income tax Losses. File state income tax Grantor trust. File state income tax Nonemployee compensation. File state income tax Corporate director. File state income tax Personal representatives. File state income tax Manager of trade or business for bankruptcy estate. File state income tax Notary public. File state income tax Election precinct official. File state income tax Difficulty-of-care payments. File state income tax Maintaining space in home. File state income tax Reporting taxable payments. File state income tax Lotteries and raffles. File state income tax Form W-2G. File state income tax Reporting winnings and recordkeeping. File state income tax Inherited pension or IRA. File state income tax Employee awards or bonuses. File state income tax Pulitzer, Nobel, and similar prizes. File state income tax Payment for services. File state income tax VA payments. File state income tax Prizes. File state income tax Strike and lockout benefits. File state income tax Prev  Up  Next   Home   More Online Publications
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Tax Information for Other Non-Profits

Life Cycle of an Exempt Organization
Links to helpful information about points of intersection between tax-exempt organizations and the IRS, including access to explanatory information and forms that an organization may need to file with the IRS.

Requirements for Exemption
A brief description of the requirements for exemption under the Internal Revenue Code, other than section 501(c)(3).

Application for recognition of exemption
Procedures for applying for exemption under IRC section 501(c).

Exempt Organizations - Required Filings
Federal annual tax filings for tax-exempt organizations.

Solicitation Notice
A brief description of the solicitation notice requirements under IRC section 6113.

Proxy tax: Tax-exempt organization fails to notify members that dues are nondeductible lobbying/political expenditures
A description of the notice, reporting, and tax requirements for certain tax-exempt organizations that incur nondeductible lobbying and political expenditures.

Employment Taxes for Exempt Organizations
Links to information about employment taxes for tax-exempt organizations.

Recent Items of Interest to Other Non-Profit Organizations
Recent items of interest to nonprofit organizations other than charitable organizations.

Tax-Exempt Organizations and Political Campaign Intervention
IRS materials on political campaign intervention by tax-exempt organizations.

Unrelated Business Income Tax
Unrelated business income tax requirements for tax-exempt organizations.

Publication 4221-NC, Compliance Guide for Tax-Exempt Organizations (Other than Charities)
A publication discussing activities that could jeopardize a tax-exempt organization's exempt status and identifying general compliance requirements on recordkeeping, reporting, and disclosure for exempt organizations.

Page Last Reviewed or Updated: 06-Mar-2014

The File State Income Tax

File state income tax 7. File state income tax   Interest Income Table of Contents Reminder Introduction Useful Items - You may want to see: General InformationSSN for joint account. File state income tax Custodian account for your child. File state income tax Penalty for failure to supply SSN. File state income tax Reporting backup withholding. File state income tax Savings account with parent as trustee. File state income tax Interest not reported on Form 1099-INT. File state income tax Nominees. File state income tax Incorrect amount. File state income tax Information reporting requirement. File state income tax Taxable InterestInterest subject to penalty for early withdrawal. File state income tax Money borrowed to invest in certificate of deposit. File state income tax U. File state income tax S. File state income tax Savings Bonds Education Savings Bond Program U. File state income tax S. File state income tax Treasury Bills, Notes, and Bonds Bonds Sold Between Interest Dates Insurance State or Local Government Obligations Original Issue Discount (OID) When To Report Interest IncomeConstructive receipt. File state income tax How To Report Interest IncomeSchedule B (Form 1040A or 1040). File state income tax Reporting tax-exempt interest. File state income tax U. File state income tax S. File state income tax savings bond interest previously reported. File state income tax Reminder Foreign-source income. File state income tax  If you are a U. File state income tax S. File state income tax citizen with interest income from sources outside the United States (foreign income), you must report that income on your tax return unless it is exempt by U. File state income tax S. File state income tax law. File state income tax This is true whether you reside inside or outside the United States and whether or not you receive a Form 1099 from the foreign payer. File state income tax Introduction This chapter discusses the following topics. File state income tax Different types of interest income. File state income tax What interest is taxable and what interest is nontaxable. File state income tax When to report interest income. File state income tax How to report interest income on your tax return. File state income tax In general, any interest you receive or that is credited to your account and can be withdrawn is taxable income. File state income tax Exceptions to this rule are discussed later in this chapter. File state income tax You may be able to deduct expenses you have in earning this income on Schedule A (Form 1040) if you itemize your deductions. File state income tax See Money borrowed to invest in certificate of deposit , later, and chapter 28. File state income tax Useful Items - You may want to see: Publication 537 Installment Sales 550 Investment Income and Expenses 1212 Guide to Original Issue Discount (OID) Instruments Form (and Instructions) Schedule B (Form 1040A or 1040) Interest and Ordinary Dividends 8815 Exclusion of Interest From Series EE and I U. File state income tax S. File state income tax Savings Bonds Issued After 1989 8818 Optional Form To Record Redemption of Series EE and I U. File state income tax S. File state income tax Savings Bonds Issued After 1989 General Information A few items of general interest are covered here. File state income tax Recordkeeping. File state income tax You should keep a list showing sources and interest amounts received during the year. File state income tax Also, keep the forms you receive showing your interest income (Forms 1099-INT, for example) as an important part of your records. File state income tax Tax on unearned income of certain children. File state income tax    Part of a child's 2013 unearned income may be taxed at the parent's tax rate. File state income tax If so, Form 8615, Tax for Certain Children Who Have Unearned Income, must be completed and attached to the child's tax return. File state income tax If not, Form 8615 is not required and the child's income is taxed at his or her own tax rate. File state income tax   Some parents can choose to include the child's interest and dividends on the parent's return. File state income tax If you can, use Form 8814, Parents' Election To Report Child's Interest and Dividends, for this purpose. File state income tax   For more information about the tax on unearned income of children and the parents' election, see chapter 31. File state income tax Beneficiary of an estate or trust. File state income tax   Interest you receive as a beneficiary of an estate or trust is generally taxable income. File state income tax You should receive a Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. File state income tax , from the fiduciary. File state income tax Your copy of Schedule K-1 (Form 1041) and its instructions will tell you where to report the income on your Form 1040. File state income tax Social security number (SSN). File state income tax   You must give your name and SSN or individual tax identification number (ITIN) to any person required by federal tax law to make a return, statement, or other document that relates to you. File state income tax This includes payers of interest. File state income tax If you do not give your SSN or ITIN to the payer of interest, you may have to pay a penalty. File state income tax SSN for joint account. File state income tax   If the funds in a joint account belong to one person, list that person's name first on the account and give that person's SSN to the payer. File state income tax (For information on who owns the funds in a joint account, see Joint accounts , later. File state income tax ) If the joint account contains combined funds, give the SSN of the person whose name is listed first on the account. File state income tax This is because only one name and SSN can be shown on Form 1099. File state income tax   These rules apply both to joint ownership by a married couple and to joint ownership by other individuals. File state income tax For example, if you open a joint savings account with your child using funds belonging to the child, list the child's name first on the account and give the child's SSN. File state income tax Custodian account for your child. File state income tax   If your child is the actual owner of an account that is recorded in your name as custodian for the child, give the child's SSN to the payer. File state income tax For example, you must give your child's SSN to the payer of interest on an account owned by your child, even though the interest is paid to you as custodian. File state income tax Penalty for failure to supply SSN. File state income tax   If you do not give your SSN to the payer of interest, you may have to pay a penalty. File state income tax See Failure to supply SSN under Penalties in chapter 1. File state income tax Backup withholding also may apply. File state income tax Backup withholding. File state income tax   Your interest income is generally not subject to regular withholding. File state income tax However, it may be subject to backup withholding to ensure that income tax is collected on the income. File state income tax Under backup withholding, the payer of interest must withhold, as income tax, on the amount you are paid, applying the appropriate withholding rate. File state income tax   Backup withholding may also be required if the IRS has determined that you underreported your interest or dividend income. File state income tax For more information, see Backup Withholding in chapter 4. File state income tax Reporting backup withholding. File state income tax   If backup withholding is deducted from your interest income, the payer must give you a Form 1099-INT for the year indicating the amount withheld. File state income tax The Form 1099-INT will show any backup withholding as “Federal income tax withheld. File state income tax ” Joint accounts. File state income tax   If two or more persons hold property (such as a savings account or bond) as joint tenants, tenants by the entirety, or tenants in common, each person's share of any interest from the property is determined by local law. File state income tax Income from property given to a child. File state income tax   Property you give as a parent to your child under the Model Gifts of Securities to Minors Act, the Uniform Gifts to Minors Act, or any similar law becomes the child's property. File state income tax   Income from the property is taxable to the child, except that any part used to satisfy a legal obligation to support the child is taxable to the parent or guardian having that legal obligation. File state income tax Savings account with parent as trustee. File state income tax   Interest income from a savings account opened for a minor child, but placed in the name and subject to the order of the parents as trustees, is taxable to the child if, under the law of the state in which the child resides, both of the following are true. File state income tax The savings account legally belongs to the child. File state income tax The parents are not legally permitted to use any of the funds to support the child. File state income tax Form 1099-INT. File state income tax   Interest income is generally reported to you on Form 1099-INT, or a similar statement, by banks, savings and loans, and other payers of interest. File state income tax This form shows you the interest you received during the year. File state income tax Keep this form for your records. File state income tax You do not have to attach it to your tax return. File state income tax   Report on your tax return the total interest income you receive for the tax year. File state income tax Interest not reported on Form 1099-INT. File state income tax   Even if you do not receive Form 1099-INT, you must still report all of your interest income. File state income tax For example, you may receive distributive shares of interest from partnerships or S corporations. File state income tax This interest is reported to you on Schedule K-1 (Form 1065), Partner's Share of Income, Deduction, Credits, etc. File state income tax , or Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, Credits, etc. File state income tax Nominees. File state income tax   Generally, if someone receives interest as a nominee for you, that person must give you a Form 1099-INT showing the interest received on your behalf. File state income tax   If you receive a Form 1099-INT that includes amounts belonging to another person, see the discussion on nominee distributions under How To Report Interest Income in chapter 1 of Publication 550, or Schedule B (Form 1040A or 1040) instructions. File state income tax Incorrect amount. File state income tax   If you receive a Form 1099-INT that shows an incorrect amount (or other incorrect information), you should ask the issuer for a corrected form. File state income tax The new Form 1099-INT you receive will be marked “Corrected. File state income tax ” Form 1099-OID. File state income tax   Reportable interest income also may be shown on Form 1099-OID, Original Issue Discount. File state income tax For more information about amounts shown on this form, see Original Issue Discount (OID) , later in this chapter. File state income tax Exempt-interest dividends. File state income tax   Exempt-interest dividends you receive from a mutual fund or other regulated investment company, including those received from a qualified fund of funds in any tax year beginning after December 22, 2010, are not included in your taxable income. File state income tax (However, see Information reporting requirement , next. File state income tax ) Exempt-interest dividends should be shown in box 10 of Form 1099-DIV. File state income tax You do not reduce your basis for distributions that are exempt-interest dividends. File state income tax Information reporting requirement. File state income tax   Although exempt-interest dividends are not taxable, you must show them on your tax return if you have to file. File state income tax This is an information reporting requirement and does not change the exempt-interest dividends into taxable income. File state income tax Note. File state income tax Exempt-interest dividends paid from specified private activity bonds may be subject to the alternative minimum tax. File state income tax See Alternative Minimum Tax (AMT) in chapter 30 for more information. File state income tax Chapter 1 of Publication 550 contains a discussion on private activity bonds under State or Local Government Obligations. File state income tax Interest on VA dividends. File state income tax   Interest on insurance dividends left on deposit with the Department of Veterans Affairs (VA) is not taxable. File state income tax This includes interest paid on dividends on converted United States Government Life Insurance and on National Service Life Insurance policies. File state income tax Individual retirement arrangements (IRAs). File state income tax   Interest on a Roth IRA generally is not taxable. File state income tax Interest on a traditional IRA is tax deferred. File state income tax You generally do not include it in your income until you make withdrawals from the IRA. File state income tax See chapter 17. File state income tax Taxable Interest Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. File state income tax The following are some sources of taxable interest. File state income tax Dividends that are actually interest. File state income tax   Certain distributions commonly called dividends are actually interest. File state income tax You must report as interest so-called “dividends” on deposits or on share accounts in: Cooperative banks, Credit unions, Domestic building and loan associations, Domestic savings and loan associations, Federal savings and loan associations, and Mutual savings banks. File state income tax  The “dividends” will be shown as interest income on Form 1099-INT. File state income tax Money market funds. File state income tax   Money market funds pay dividends and are offered by nonbank financial institutions, such as mutual funds and stock brokerage houses. File state income tax Generally, amounts you receive from money market funds should be reported as dividends, not as interest. File state income tax Certificates of deposit and other deferred interest accounts. File state income tax   If you open any of these accounts, interest may be paid at fixed intervals of 1 year or less during the term of the account. File state income tax You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. File state income tax The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. File state income tax If interest is deferred for more than 1 year, see Original Issue Discount (OID) , later. File state income tax Interest subject to penalty for early withdrawal. File state income tax   If you withdraw funds from a deferred interest account before maturity, you may have to pay a penalty. File state income tax You must report the total amount of interest paid or credited to your account during the year, without subtracting the penalty. File state income tax See Penalty on early withdrawal of savings in chapter 1 of Publication 550 for more information on how to report the interest and deduct the penalty. File state income tax Money borrowed to invest in certificate of deposit. File state income tax   The interest you pay on money borrowed from a bank or savings institution to meet the minimum deposit required for a certificate of deposit from the institution and the interest you earn on the certificate are two separate items. File state income tax You must report the total interest you earn on the certificate in your income. File state income tax If you itemize deductions, you can deduct the interest you pay as investment interest, up to the amount of your net investment income. File state income tax See Interest Expenses in chapter 3 of Publication 550. File state income tax Example. File state income tax You deposited $5,000 with a bank and borrowed $5,000 from the bank to make up the $10,000 minimum deposit required to buy a 6-month certificate of deposit. File state income tax The certificate earned $575 at maturity in 2013, but you received only $265, which represented the $575 you earned minus $310 interest charged on your $5,000 loan. File state income tax The bank gives you a Form 1099-INT for 2013 showing the $575 interest you earned. File state income tax The bank also gives you a statement showing that you paid $310 interest for 2013. File state income tax You must include the $575 in your income. File state income tax If you itemize your deductions on Schedule A (Form 1040), you can deduct $310, subject to the net investment income limit. File state income tax Gift for opening account. File state income tax   If you receive noncash gifts or services for making deposits or for opening an account in a savings institution, you may have to report the value as interest. File state income tax   For deposits of less than $5,000, gifts or services valued at more than $10 must be reported as interest. File state income tax For deposits of $5,000 or more, gifts or services valued at more than $20 must be reported as interest. File state income tax The value is determined by the cost to the financial institution. File state income tax Example. File state income tax You open a savings account at your local bank and deposit $800. File state income tax The account earns $20 interest. File state income tax You also receive a $15 calculator. File state income tax If no other interest is credited to your account during the year, the Form 1099-INT you receive will show $35 interest for the year. File state income tax You must report $35 interest income on your tax return. File state income tax Interest on insurance dividends. File state income tax   Interest on insurance dividends left on deposit with an insurance company that can be withdrawn annually is taxable to you in the year it is credited to your account. File state income tax However, if you can withdraw it only on the anniversary date of the policy (or other specified date), the interest is taxable in the year that date occurs. File state income tax Prepaid insurance premiums. File state income tax   Any increase in the value of prepaid insurance premiums, advance premiums, or premium deposit funds is interest if it is applied to the payment of premiums due on insurance policies or made available for you to withdraw. File state income tax U. File state income tax S. File state income tax obligations. File state income tax   Interest on U. File state income tax S. File state income tax obligations, such as U. File state income tax S. File state income tax Treasury bills, notes, and bonds, issued by any agency or instrumentality of the United States is taxable for federal income tax purposes. File state income tax Interest on tax refunds. File state income tax   Interest you receive on tax refunds is taxable income. File state income tax Interest on condemnation award. File state income tax   If the condemning authority pays you interest to compensate you for a delay in payment of an award, the interest is taxable. File state income tax Installment sale payments. File state income tax   If a contract for the sale or exchange of property provides for deferred payments, it also usually provides for interest payable with the deferred payments. File state income tax That interest is taxable when you receive it. File state income tax If little or no interest is provided for in a deferred payment contract, part of each payment may be treated as interest. File state income tax See Unstated Interest and Original Issue Discount in Publication 537, Installment Sales. File state income tax Interest on annuity contract. File state income tax   Accumulated interest on an annuity contract you sell before its maturity date is taxable. File state income tax Usurious interest. File state income tax   Usurious interest is interest charged at an illegal rate. File state income tax This is taxable as interest unless state law automatically changes it to a payment on the principal. File state income tax Interest income on frozen deposits. File state income tax   Exclude from your gross income interest on frozen deposits. File state income tax A deposit is frozen if, at the end of the year, you cannot withdraw any part of the deposit because: The financial institution is bankrupt or insolvent, or The state where the institution is located has placed limits on withdrawals because other financial institutions in the state are bankrupt or insolvent. File state income tax   The amount of interest you must exclude is the interest that was credited on the frozen deposits minus the sum of: The net amount you withdrew from these deposits during the year, and The amount you could have withdrawn as of the end of the year (not reduced by any penalty for premature withdrawals of a time deposit). File state income tax If you receive a Form 1099-INT for interest income on deposits that were frozen at the end of 2013, see Frozen deposits under How To Report Interest Income in chapter 1 of Publication 550, for information about reporting this interest income exclusion on your tax return. File state income tax   The interest you exclude is treated as credited to your account in the following year. File state income tax You must include it in income in the year you can withdraw it. File state income tax Example. File state income tax $100 of interest was credited on your frozen deposit during the year. File state income tax You withdrew $80 but could not withdraw any more as of the end of the year. File state income tax You must include $80 in your income and exclude $20 from your income for the year. File state income tax You must include the $20 in your income for the year you can withdraw it. File state income tax Bonds traded flat. File state income tax   If you buy a bond at a discount when interest has been defaulted or when the interest has accrued but has not been paid, the transaction is described as trading a bond flat. File state income tax The defaulted or unpaid interest is not income and is not taxable as interest if paid later. File state income tax When you receive a payment of that interest, it is a return of capital that reduces the remaining cost basis of your bond. File state income tax Interest that accrues after the date of purchase, however, is taxable interest income for the year it is received or accrued. File state income tax See Bonds Sold Between Interest Dates , later, for more information. File state income tax Below-market loans. File state income tax   In general, a below-market loan is a loan on which no interest is charged or on which interest is charged at a rate below the applicable federal rate. File state income tax See Below-Market Loans in chapter 1 of Publication 550 for more information. File state income tax U. File state income tax S. File state income tax Savings Bonds This section provides tax information on U. File state income tax S. File state income tax savings bonds. File state income tax It explains how to report the interest income on these bonds and how to treat transfers of these bonds. File state income tax For other information on U. File state income tax S. File state income tax savings bonds, write to:  For series EE and I paper savings bonds: Bureau of the Public Debt Division of Customer Assistance P. File state income tax O. File state income tax Box 7012 Parkersburg, WV 26106-7012  For series EE and I electronic bonds: Bureau of the Public Debt Division of Customer Assistance P. File state income tax O. File state income tax Box 7015 Parkersburg, WV 26106–7015  For series HH/H: Bureau of the Public Debt Division of Customer Assistance P. File state income tax O. File state income tax Box 2186 Parkersburg, WV 26106-2186 Or, on the Internet, visit: www. File state income tax treasurydirect. File state income tax gov/indiv/indiv. File state income tax htm. File state income tax Accrual method taxpayers. File state income tax   If you use an accrual method of accounting, you must report interest on U. File state income tax S. File state income tax savings bonds each year as it accrues. File state income tax You cannot postpone reporting interest until you receive it or until the bonds mature. File state income tax Accrual methods of accounting are explained in chapter 1 under Accounting Methods . File state income tax Cash method taxpayers. File state income tax   If you use the cash method of accounting, as most individual taxpayers do, you generally report the interest on U. File state income tax S. File state income tax savings bonds when you receive it. File state income tax The cash method of accounting is explained in chapter 1 under Accounting Methods. File state income tax But see Reporting options for cash method taxpayers , later. File state income tax Series HH bonds. File state income tax    These bonds were issued at face value. File state income tax Interest is paid twice a year by direct deposit to your bank account. File state income tax If you are a cash method taxpayer, you must report interest on these bonds as income in the year you receive it. File state income tax   Series HH bonds were first offered in 1980 and last offered in August 2004. File state income tax Before 1980, series H bonds were issued. File state income tax Series H bonds are treated the same as series HH bonds. File state income tax If you are a cash method taxpayer, you must report the interest when you receive it. File state income tax   Series H bonds have a maturity period of 30 years. File state income tax Series HH bonds mature in 20 years. File state income tax The last series H bonds matured in 2009. File state income tax Series EE and series I bonds. File state income tax   Interest on these bonds is payable when you redeem the bonds. File state income tax The difference between the purchase price and the redemption value is taxable interest. File state income tax Series EE bonds. File state income tax   Series EE bonds were first offered in January 1980 and have a maturity period of 30 years. File state income tax   Before July 1980, series E bonds were issued. File state income tax The original 10-year maturity period of series E bonds has been extended to 40 years for bonds issued before December 1965 and 30 years for bonds issued after November 1965. File state income tax Paper series EE and series E bonds are issued at a discount. File state income tax The face value is payable to you at maturity. File state income tax Electronic series EE bonds are issued at their face value. File state income tax The face value plus accrued interest is payable to you at maturity. File state income tax As of January 1, 2012, paper savings bonds were no longer sold at financial institutions. File state income tax   Owners of paper series EE bonds can convert them to electronic bonds. File state income tax These converted bonds do not retain the denomination listed on the paper certificate but are posted at their purchase price (with accrued interest). File state income tax Series I bonds. File state income tax   Series I bonds were first offered in 1998. File state income tax These are inflation-indexed bonds issued at their face amount with a maturity period of 30 years. File state income tax The face value plus all accrued interest is payable to you at maturity. File state income tax Reporting options for cash method taxpayers. File state income tax   If you use the cash method of reporting income, you can report the interest on series EE, series E, and series I bonds in either of the following ways. File state income tax Method 1. File state income tax Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year they mature. File state income tax (However, see Savings bonds traded , later. File state income tax )  Note. File state income tax Series EE bonds issued in 1983 matured in 2013. File state income tax If you have used method 1, you generally must report the interest on these bonds on your 2013 return. File state income tax The last series E bonds were issued in 1980 and matured in 2010. File state income tax If you used method 1, you generally should have reported the interest on these bonds on your 2010 return. File state income tax Method 2. File state income tax Choose to report the increase in redemption value as interest each year. File state income tax You must use the same method for all series EE, series E, and series I bonds you own. File state income tax If you do not choose method 2 by reporting the increase in redemption value as interest each year, you must use method 1. File state income tax    If you plan to cash your bonds in the same year you will pay for higher education expenses, you may want to use method 1 because you may be able to exclude the interest from your income. File state income tax To learn how, see Education Savings Bond Program, later. File state income tax Change from method 1. File state income tax   If you want to change your method of reporting the interest from method 1 to method 2, you can do so without permission from the IRS. File state income tax In the year of change you must report all interest accrued to date and not previously reported for all your bonds. File state income tax   Once you choose to report the interest each year, you must continue to do so for all series EE, series E, and series I bonds you own and for any you get later, unless you request permission to change, as explained next. File state income tax Change from method 2. File state income tax   To change from method 2 to method 1, you must request permission from the IRS. File state income tax Permission for the change is automatically granted if you send the IRS a statement that meets all the following requirements. File state income tax You have typed or printed the following number at the top: “131. File state income tax ” It includes your name and social security number under “131. File state income tax ” It includes the year of change (both the beginning and ending dates). File state income tax It identifies the savings bonds for which you are requesting this change. File state income tax It includes your agreement to: Report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, and Report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of the interest reported in prior tax years. File state income tax   You must attach this statement to your tax return for the year of change, which you must file by the due date (including extensions). File state income tax   You can have an automatic extension of 6 months from the due date of your return for the year of change (excluding extensions) to file the statement with an amended return. File state income tax On the statement, type or print “Filed pursuant to section 301. File state income tax 9100-2. File state income tax ” To get this extension, you must have filed your original return for the year of the change by the due date (including extensions). File state income tax    By the date you file the original statement with your return, you must also send a signed copy to the address below. File state income tax   Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) P. File state income tax O. File state income tax Box 7604 Benjamin Franklin Station Washington, DC 20044   If you use a private delivery service, send the signed copy to the address below. File state income tax   Internal Revenue Service Attention: CC:IT&A (Automatic Rulings Branch) Room 5336 1111 Constitution Avenue, NW  Washington, DC 20224   Instead of filing this statement, you can request permission to change from method 2 to method 1 by filing Form 3115, Application for Change in Accounting Method. File state income tax In that case, follow the form instructions for an automatic change. File state income tax No user fee is required. File state income tax Co-owners. File state income tax   If a U. File state income tax S. File state income tax savings bond is issued in the names of co-owners, such as you and your child or you and your spouse, interest on the bond is generally taxable to the co-owner who bought the bond. File state income tax One co-owner's funds used. File state income tax    If you used your funds to buy the bond, you must pay the tax on the interest. File state income tax This is true even if you let the other co-owner redeem the bond and keep all the proceeds. File state income tax Under these circumstances, the co-owner who redeemed the bond will receive a Form 1099-INT at the time of redemption and must provide you with another Form 1099-INT showing the amount of interest from the bond taxable to you. File state income tax The co-owner who redeemed the bond is a “nominee. File state income tax ” See Nominee distributions under How To Report Interest Income in chapter 1 of Publication 550 for more information about how a person who is a nominee reports interest income belonging to another person. File state income tax Both co-owners' funds used. File state income tax   If you and the other co-owner each contribute part of the bond's purchase price, the interest is generally taxable to each of you, in proportion to the amount each of you paid. File state income tax Community property. File state income tax   If you and your spouse live in a community property state and hold bonds as community property, one-half of the interest is considered received by each of you. File state income tax If you file separate returns, each of you generally must report one-half of the bond interest. File state income tax For more information about community property, see Publication 555. File state income tax Table 7-1. File state income tax   These rules are also shown in Table 7-1. File state income tax Ownership transferred. File state income tax   If you bought series E, series EE, or series I bonds entirely with your own funds and had them reissued in your co-owner's name or beneficiary's name alone, you must include in your gross income for the year of reissue all interest that you earned on these bonds and have not previously reported. File state income tax But, if the bonds were reissued in your name alone, you do not have to report the interest accrued at that time. File state income tax   This same rule applies when bonds (other than bonds held as community property) are transferred between spouses or incident to divorce. File state income tax Purchased jointly. File state income tax   If you and a co-owner each contributed funds to buy series E, series EE, or series I bonds jointly and later have the bonds reissued in the co-owner's name alone, you must include in your gross income for the year of reissue your share of all the interest earned on the bonds that you have not previously reported. File state income tax The former co-owner does not have to include in gross income at the time of reissue his or her share of the interest earned that was not reported before the transfer. File state income tax This interest, however, as well as all interest earned after the reissue, is income to the former co-owner. File state income tax   This income-reporting rule also applies when the bonds are reissued in the name of your former co-owner and a new co-owner. File state income tax But the new co-owner will report only his or her share of the interest earned after the transfer. File state income tax   If bonds that you and a co-owner bought jointly are reissued to each of you separately in the same proportion as your contribution to the purchase price, neither you nor your co-owner has to report at that time the interest earned before the bonds were reissued. File state income tax    Table 7-1. File state income tax Who Pays the Tax on U. File state income tax S. File state income tax Savings Bond Interest IF . File state income tax . File state income tax . File state income tax THEN the interest must be reported by . File state income tax . File state income tax . File state income tax you buy a bond in your name and the name of another person as co-owners, using only your own funds you. File state income tax you buy a bond in the name of another person, who is the sole owner of the bond the person for whom you bought the bond. File state income tax you and another person buy a bond as co-owners, each contributing part of the purchase price both you and the other co-owner, in proportion to the amount each paid for the bond. File state income tax you and your spouse, who live in a community property state, buy a bond that is community property you and your spouse. File state income tax If you file separate returns, both you and your spouse generally report one-half of the interest. File state income tax Example 1. File state income tax You and your spouse each spent an equal amount to buy a $1,000 series EE savings bond. File state income tax The bond was issued to you and your spouse as co-owners. File state income tax You both postpone reporting interest on the bond. File state income tax You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. File state income tax At that time neither you nor your spouse has to report the interest earned to the date of reissue. File state income tax Example 2. File state income tax You bought a $1,000 series EE savings bond entirely with your own funds. File state income tax The bond was issued to you and your spouse as co-owners. File state income tax You both postpone reporting interest on the bond. File state income tax You later have the bond reissued as two $500 bonds, one in your name and one in your spouse's name. File state income tax You must report half the interest earned to the date of reissue. File state income tax Transfer to a trust. File state income tax   If you own series E, series EE, or series I bonds and transfer them to a trust, giving up all rights of ownership, you must include in your income for that year the interest earned to the date of transfer if you have not already reported it. File state income tax However, if you are considered the owner of the trust and if the increase in value both before and after the transfer continues to be taxable to you, you can continue to defer reporting the interest earned each year. File state income tax You must include the total interest in your income in the year you cash or dispose of the bonds or the year the bonds finally mature, whichever is earlier. File state income tax   The same rules apply to previously unreported interest on series EE or series E bonds if the transfer to a trust consisted of series HH or series H bonds you acquired in a trade for the series EE or series E bonds. File state income tax See Savings bonds traded , later. File state income tax Decedents. File state income tax   The manner of reporting interest income on series E, series EE, or series I bonds, after the death of the owner (decedent), depends on the accounting and income-reporting methods previously used by the decedent. File state income tax This is explained in chapter 1 of Publication 550. File state income tax Savings bonds traded. File state income tax   If you postponed reporting the interest on your series EE or series E bonds, you did not recognize taxable income when you traded the bonds for series HH or series H bonds, unless you received cash in the trade. File state income tax (You cannot trade series I bonds for series HH bonds. File state income tax After August 31, 2004, you cannot trade any other series of bonds for series HH bonds. File state income tax ) Any cash you received is income up to the amount of the interest earned on the bonds traded. File state income tax When your series HH or series H bonds mature, or if you dispose of them before maturity, you report as interest the difference between their redemption value and your cost. File state income tax Your cost is the sum of the amount you paid for the traded series EE or series E bonds plus any amount you had to pay at the time of the trade. File state income tax Example. File state income tax You traded series EE bonds (on which you postponed reporting the interest) for $2,500 in series HH bonds and $223 in cash. File state income tax You reported the $223 as taxable income on your tax return. File state income tax At the time of the trade, the series EE bonds had accrued interest of $523 and a redemption value of $2,723. File state income tax You hold the series HH bonds until maturity, when you receive $2,500. File state income tax You must report $300 as interest income in the year of maturity. File state income tax This is the difference between their redemption value, $2,500, and your cost, $2,200 (the amount you paid for the series EE bonds). File state income tax (It is also the difference between the accrued interest of $523 on the series EE bonds and the $223 cash received on the trade. File state income tax ) Choice to report interest in year of trade. File state income tax   You could have chosen to treat all of the previously unreported accrued interest on the series EE or series E bonds traded for series HH bonds as income in the year of the trade. File state income tax If you made this choice, it is treated as a change from method 1. File state income tax See Change from method 1 under Series EE and series I bonds, earlier. File state income tax Form 1099-INT for U. File state income tax S. File state income tax savings bonds interest. File state income tax   When you cash a bond, the bank or other payer that redeems it must give you a Form 1099-INT if the interest part of the payment you receive is $10 or more. File state income tax Box 3 of your Form 1099-INT should show the interest as the difference between the amount you received and the amount paid for the bond. File state income tax However, your Form 1099-INT may show more interest than you have to include on your income tax return. File state income tax For example, this may happen if any of the following are true. File state income tax You chose to report the increase in the redemption value of the bond each year. File state income tax The interest shown on your Form 1099-INT will not be reduced by amounts previously included in income. File state income tax You received the bond from a decedent. File state income tax The interest shown on your Form 1099-INT will not be reduced by any interest reported by the decedent before death, or on the decedent's final return, or by the estate on the estate's income tax return. File state income tax Ownership of the bond was transferred. File state income tax The interest shown on your Form 1099-INT will not be reduced by interest that accrued before the transfer. File state income tax You were named as a co-owner, and the other co-owner contributed funds to buy the bond. File state income tax The interest shown on your Form 1099-INT will not be reduced by the amount you received as nominee for the other co-owner. File state income tax (See Co-owners , earlier in this chapter, for more information about the reporting requirements. File state income tax ) You received the bond in a taxable distribution from a retirement or profit-sharing plan. File state income tax The interest shown on your Form 1099-INT will not be reduced by the interest portion of the amount taxable as a distribution from the plan and not taxable as interest. File state income tax (This amount is generally shown on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. File state income tax , for the year of distribution. File state income tax )   For more information on including the correct amount of interest on your return, see How To Report Interest Income , later. File state income tax Publication 550 includes examples showing how to report these amounts. File state income tax    Interest on U. File state income tax S. File state income tax savings bonds is exempt from state and local taxes. File state income tax The Form 1099-INT you receive will indicate the amount that is for U. File state income tax S. File state income tax savings bond interest in box 3. File state income tax Education Savings Bond Program You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U. File state income tax S. File state income tax savings bonds during the year if you pay qualified higher educational expenses during the same year. File state income tax This exclusion is known as the Education Savings Bond Program. File state income tax You do not qualify for this exclusion if your filing status is married filing separately. File state income tax Form 8815. File state income tax   Use Form 8815 to figure your exclusion. File state income tax Attach the form to your Form 1040 or Form 1040A. File state income tax Qualified U. File state income tax S. File state income tax savings bonds. File state income tax   A qualified U. File state income tax S. File state income tax savings bond is a series EE bond issued after 1989 or a series I bond. File state income tax The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). File state income tax You must be at least 24 years old before the bond's issue date. File state income tax For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. File state income tax    The issue date of a bond may be earlier than the date the bond is purchased because the issue date assigned to a bond is the first day of the month in which it is purchased. File state income tax Beneficiary. File state income tax   You can designate any individual (including a child) as a beneficiary of the bond. File state income tax Verification by IRS. File state income tax   If you claim the exclusion, the IRS will check it by using bond redemption information from the Department of the Treasury. File state income tax Qualified expenses. File state income tax   Qualified higher educational expenses are tuition and fees required for you, your spouse, or your dependent (for whom you claim an exemption) to attend an eligible educational institution. File state income tax   Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account. File state income tax   Qualified expenses do not include expenses for room and board or for courses involving sports, games, or hobbies that are not part of a degree or certificate granting program. File state income tax Eligible educational institutions. File state income tax   These institutions include most public, private, and nonprofit universities, colleges, and vocational schools that are accredited and eligible to participate in student aid programs run by the U. File state income tax S. File state income tax Department of Education. File state income tax Reduction for certain benefits. File state income tax   You must reduce your qualified higher educational expenses by all of the following tax-free benefits. File state income tax Tax-free part of scholarships and fellowships (see Scholarships and fellowships in chapter 12). File state income tax Expenses used to figure the tax-free portion of distributions from a Coverdell ESA. File state income tax Expenses used to figure the tax-free portion of distributions from a qualified tuition program. File state income tax Any tax-free payments (other than gifts or inheritances) received for educational expenses, such as Veterans' educational assistance benefits, Qualified tuition reductions, or Employer-provided educational assistance. File state income tax Any expense used in figuring the American Opportunity and lifetime learning credits. File state income tax Amount excludable. File state income tax   If the total proceeds (interest and principal) from the qualified U. File state income tax S. File state income tax savings bonds you redeem during the year are not more than your adjusted qualified higher educational expenses for the year, you may be able to exclude all of the interest. File state income tax If the proceeds are more than the expenses, you may be able to exclude only part of the interest. File state income tax   To determine the excludable amount, multiply the interest part of the proceeds by a fraction. File state income tax The numerator of the fraction is the qualified higher educational expenses you paid during the year. File state income tax The denominator of the fraction is the total proceeds you received during the year. File state income tax Example. File state income tax In February 2013, Mark and Joan, a married couple, cashed a qualified series EE U. File state income tax S. File state income tax savings bond they bought in April 1997. File state income tax They received proceeds of $8,372 representing principal of $5,000 and interest of $3,372. File state income tax In 2013, they paid $4,000 of their daughter's college tuition. File state income tax They are not claiming an education credit for that amount, and their daughter does not have any tax-free educational assistance. File state income tax They can exclude $1,611 ($3,372 × ($4,000 ÷ $8,372)) of interest in 2013. File state income tax They must pay tax on the remaining $1,761 ($3,372 − $1,611) interest. File state income tax Modified adjusted gross income limit. File state income tax   The interest exclusion is limited if your modified adjusted gross income (modified AGI) is: $74,700 to $89,700 for taxpayers filing single or head of household, and $112,050 to $142,050 for married taxpayers filing jointly or for a qualifying widow(er) with dependent child. File state income tax You do not qualify for the interest exclusion if your modified AGI is equal to or more than the upper limit for your filing status. File state income tax   Modified AGI, for purposes of this exclusion, is adjusted gross income (Form 1040, line 37, or Form 1040A, line 21) figured before the interest exclusion, and modified by adding back any: Foreign earned income exclusion, Foreign housing exclusion and deduction, Exclusion of income for bona fide residents of American Samoa, Exclusion for income from Puerto Rico, Exclusion for adoption benefits received under an employer's adoption assistance program, Deduction for tuition and fees, Deduction for student loan interest, and Deduction for domestic production activities. File state income tax   Use the Line 9 Worksheet in the Form 8815 instructions to figure your modified AGI. File state income tax If you claim any of the exclusion or deduction items listed above (except items 6, 7, and 8), add the amount of the exclusion or deduction (except items 6, 7, and 8) to the amount on line 5 of the worksheet, and enter the total on Form 8815, line 9, as your modified AGI. File state income tax   If you have investment interest expense incurred to earn royalties and other investment income, see Education Savings Bond Program in chapter 1 of Publication 550. File state income tax Recordkeeping. File state income tax If you claim the interest exclusion, you must keep a written record of the qualified U. File state income tax S. File state income tax savings bonds you redeem. File state income tax Your record must include the serial number, issue date, face value, and total redemption proceeds (principal and interest) of each bond. File state income tax You can use Form 8818 to record this information. File state income tax You should also keep bills, receipts, canceled checks, or other documentation that shows you paid qualified higher educational expenses during the year. File state income tax U. File state income tax S. File state income tax Treasury Bills, Notes, and Bonds Treasury bills, notes, and bonds are direct debts (obligations) of the U. File state income tax S. File state income tax Government. File state income tax Taxation of interest. File state income tax   Interest income from Treasury bills, notes, and bonds is subject to federal income tax but is exempt from all state and local income taxes. File state income tax You should receive Form 1099-INT showing the interest (in box 3) paid to you for the year. File state income tax   Payments of principal and interest generally will be credited to your designated checking or savings account by direct deposit through the TreasuryDirect® system. File state income tax Treasury bills. File state income tax   These bills generally have a 4-week, 13-week, 26-week, or 52-week maturity period. File state income tax They are generally issued at a discount in the amount of $100 and multiples of $100. File state income tax The difference between the discounted price you pay for the bills and the face value you receive at maturity is interest income. File state income tax Generally, you report this interest income when the bill is paid at maturity. File state income tax If you paid a premium for a bill (more than the face value), you generally report the premium as a section 171 deduction when the bill is paid at maturity. File state income tax Treasury notes and bonds. File state income tax   Treasury notes have maturity periods of more than 1 year, ranging up to 10 years. File state income tax Maturity periods for Treasury bonds are longer than 10 years. File state income tax Both generally are issued in denominations of $100 to $1 million and generally pay interest every 6 months. File state income tax Generally, you report this interest for the year paid. File state income tax For more information, see U. File state income tax S. File state income tax Treasury Bills, Notes, and Bonds in chapter 1 of Publication 550. File state income tax For other information on Treasury notes or bonds, write to:  Bureau of the Public Debt P. File state income tax O. File state income tax Box 7015 Parkersburg, WV 26106-7015 Or, on the Internet, visit: www. File state income tax treasurydirect. File state income tax gov/indiv/indiv. File state income tax htm. File state income tax For information on series EE, series I, and series HH savings bonds, see U. File state income tax S. File state income tax Savings Bonds , earlier. File state income tax Treasury inflation-protected securities (TIPS). File state income tax   These securities pay interest twice a year at a fixed rate, based on a principal amount adjusted to take into account inflation and deflation. File state income tax For the tax treatment of these securities, see Inflation-Indexed Debt Instruments under Original Issue Discount (OID), in Publication 550. File state income tax Bonds Sold Between Interest Dates If you sell a bond between interest payment dates, part of the sales price represents interest accrued to the date of sale. File state income tax You must report that part of the sales price as interest income for the year of sale. File state income tax If you buy a bond between interest payment dates, part of the purchase price represents interest accrued before the date of purchase. File state income tax When that interest is paid to you, treat it as a return of your capital investment, rather than interest income, by reducing your basis in the bond. File state income tax See Accrued interest on bonds under How To Report Interest Income in chapter 1 of Publication 550 for information on reporting the payment. File state income tax Insurance Life insurance proceeds paid to you as beneficiary of the insured person are usually not taxable. File state income tax But if you receive the proceeds in installments, you must usually report a part of each installment payment as interest income. File state income tax For more information about insurance proceeds received in installments, see Publication 525, Taxable and Nontaxable Income. File state income tax Annuity. File state income tax   If you buy an annuity with life insurance proceeds, the annuity payments you receive are taxed as pension and annuity income from a nonqualified plan, not as interest income. File state income tax See chapter 10 for information on pension and annuity income from nonqualified plans. File state income tax State or Local Government Obligations Interest on a bond used to finance government operations generally is not taxable if the bond is issued by a state, the District of Columbia, a possession of the United States, or any of their political subdivisions. File state income tax Bonds issued after 1982 (including tribal economic development bonds issued after February 17, 2009) by an Indian tribal government are treated as issued by a state. File state income tax Interest on these bonds is generally tax exempt if the bonds are part of an issue of which substantially all proceeds are to be used in the exercise of any essential government function. File state income tax For information on federally guaranteed bonds, mortgage revenue bonds, arbitrage bonds, private activity bonds, qualified tax credit bonds, and Build America bonds, see State or Local Government Obligations in chapter 1 of Publication 550. File state income tax Information reporting requirement. File state income tax   If you must file a tax return, you are required to show any tax-exempt interest you received on your return. File state income tax This is an information reporting requirement only. File state income tax It does not change tax-exempt interest to taxable interest. File state income tax Original Issue Discount (OID) Original issue discount (OID) is a form of interest. File state income tax You generally include OID in your income as it accrues over the term of the debt instrument, whether or not you receive any payments from the issuer. File state income tax A debt instrument generally has OID when the instrument is issued for a price that is less than its stated redemption price at maturity. File state income tax OID is the difference between the stated redemption price at maturity and the issue price. File state income tax All debt instruments that pay no interest before maturity are presumed to be issued at a discount. File state income tax Zero coupon bonds are one example of these instruments. File state income tax The OID accrual rules generally do not apply to short-term obligations (those with a fixed maturity date of 1 year or less from date of issue). File state income tax See Discount on Short-Term Obligations in chapter 1 of Publication 550. File state income tax De minimis OID. File state income tax   You can treat the discount as zero if it is less than one-fourth of 1% (. File state income tax 0025) of the stated redemption price at maturity multiplied by the number of full years from the date of original issue to maturity. File state income tax This small discount is known as “de minimis” OID. File state income tax Example 1. File state income tax You bought a 10-year bond with a stated redemption price at maturity of $1,000, issued at $980 with OID of $20. File state income tax One-fourth of 1% of $1,000 (stated redemption price) times 10 (the number of full years from the date of original issue to maturity) equals $25. File state income tax Because the $20 discount is less than $25, the OID is treated as zero. File state income tax (If you hold the bond at maturity, you will recognize $20 ($1,000 − $980) of capital gain. File state income tax ) Example 2. File state income tax The facts are the same as in Example 1, except that the bond was issued at $950. File state income tax The OID is $50. File state income tax Because the $50 discount is more than the $25 figured in Example 1, you must include the OID in income as it accrues over the term of the bond. File state income tax Debt instrument bought after original issue. File state income tax   If you buy a debt instrument with de minimis OID at a premium, the discount is not includible in income. File state income tax If you buy a debt instrument with de minimis OID at a discount, the discount is reported under the market discount rules. File state income tax See Market Discount Bonds in chapter 1 of Publication 550. File state income tax Exceptions to reporting OID. File state income tax   The OID rules discussed in this chapter do not apply to the following debt instruments. File state income tax Tax-exempt obligations. File state income tax (However, see Stripped tax-exempt obligations under Stripped Bonds and Coupons in chapter 1 of Publication 550). File state income tax U. File state income tax S. File state income tax savings bonds. File state income tax Short-term debt instruments (those with a fixed maturity date of not more than 1 year from the date of issue). File state income tax Obligations issued by an individual before March 2, 1984. File state income tax Loans between individuals if all the following are true. File state income tax The lender is not in the business of lending money. File state income tax The amount of the loan, plus the amount of any outstanding prior loans between the same individuals, is $10,000 or less. File state income tax Avoiding any federal tax is not one of the principal purposes of the loan. File state income tax Form 1099-OID. File state income tax   The issuer of the debt instrument (or your broker if you held the instrument through a broker) should give you Form 1099-OID, or a similar statement, if the total OID for the calendar year is $10 or more. File state income tax Form 1099-OID will show, in box 1, the amount of OID for the part of the year that you held the bond. File state income tax It also will show, in box 2, the stated interest you must include in your income. File state income tax A copy of Form 1099-OID will be sent to the IRS. File state income tax Do not file your copy with your return. File state income tax Keep it for your records. File state income tax   In most cases, you must report the entire amount in boxes 1 and 2 of Form 1099-OID as interest income. File state income tax But see Refiguring OID shown on Form 1099-OID, later in this discussion, for more information. File state income tax Form 1099-OID not received. File state income tax   If you had OID for the year but did not receive a Form 1099-OID, you can find tables on IRS. File state income tax gov that list total OID on certain debt instruments and have information that will help you figure OID. File state income tax For the latest OID tables, go to www. File state income tax irs. File state income tax gov and enter “OID tables” in the Search box. File state income tax If your debt instrument is not listed, consult the issuer for further information about the accrued OID for the year. File state income tax Nominee. File state income tax   If someone else is the holder of record (the registered owner) of an OID instrument belonging to you and receives a Form 1099-OID on your behalf, that person must give you a Form 1099-OID. File state income tax Refiguring OID shown on Form 1099-OID. File state income tax   You must refigure the OID shown in box 1 or box 8 of Form 1099-OID if either of the following apply. File state income tax You bought the debt instrument after its original issue and paid a premium or an acquisition premium. File state income tax The debt instrument is a stripped bond or a stripped coupon (including certain zero coupon instruments). File state income tax For information about figuring the correct amount of OID to include in your income, see Figuring OID on Long-Term Debt Instruments in Publication 1212. File state income tax Refiguring periodic interest shown on Form 1099-OID. File state income tax   If you disposed of a debt instrument or acquired it from another holder during the year, see Bonds Sold Between Interest Dates , earlier, for information about the treatment of periodic interest that may be shown in box 2 of Form 1099-OID for that instrument. File state income tax Certificates of deposit (CDs). File state income tax   If you buy a CD with a maturity of more than 1 year, you must include in income each year a part of the total interest due and report it in the same manner as other OID. File state income tax   This also applies to similar deposit arrangements with banks, building and loan associations, etc. File state income tax , including: Time deposits, Bonus plans, Savings certificates, Deferred income certificates, Bonus savings certificates, and Growth savings certificates. File state income tax Bearer CDs. File state income tax   CDs issued after 1982 generally must be in registered form. File state income tax Bearer CDs are CDs not in registered form. File state income tax They are not issued in the depositor's name and are transferable from one individual to another. File state income tax   Banks must provide the IRS and the person redeeming a bearer CD with a Form 1099-INT. File state income tax More information. File state income tax   See chapter 1 of Publication 550 for more information about OID and related topics, such as market discount bonds. File state income tax When To Report Interest Income When to report your interest income depends on whether you use the cash method or an accrual method to report income. File state income tax Cash method. File state income tax   Most individual taxpayers use the cash method. File state income tax If you use this method, you generally report your interest income in the year in which you actually or constructively receive it. File state income tax However, there are special rules for reporting the discount on certain debt instruments. File state income tax See U. File state income tax S. File state income tax Savings Bonds and Original Issue Discount (OID) , earlier. File state income tax Example. File state income tax On September 1, 2011, you loaned another individual $2,000 at 12%, compounded annually. File state income tax You are not in the business of lending money. File state income tax The note stated that principal and interest would be due on August 31, 2013. File state income tax In 2013, you received $2,508. File state income tax 80 ($2,000 principal and $508. File state income tax 80 interest). File state income tax If you use the cash method, you must include in income on your 2013 return the $508. File state income tax 80 interest you received in that year. File state income tax Constructive receipt. File state income tax   You constructively receive income when it is credited to your account or made available to you. File state income tax You do not need to have physical possession of it. File state income tax For example, you are considered to receive interest, dividends, or other earnings on any deposit or account in a bank, savings and loan, or similar financial institution, or interest on life insurance policy dividends left to accumulate, when they are credited to your account and subject to your withdrawal. File state income tax This is true even if they are not yet entered in your passbook. File state income tax   You constructively receive income on the deposit or account even if you must: Make withdrawals in multiples of even amounts, Give a notice to withdraw before making the withdrawal, Withdraw all or part of the account to withdraw the earnings, or Pay a penalty on early withdrawals, unless the interest you are to receive on an early withdrawal or redemption is substantially less than the interest payable at maturity. File state income tax Accrual method. File state income tax   If you use an accrual method, you report your interest income when you earn it, whether or not you have received it. File state income tax Interest is earned over the term of the debt instrument. File state income tax Example. File state income tax If, in the previous example, you use an accrual method, you must include the interest in your income as you earn it. File state income tax You would report the interest as follows: 2011, $80; 2012, $249. File state income tax 60; and 2013, $179. File state income tax 20. File state income tax Coupon bonds. File state income tax   Interest on coupon bonds is taxable in the year the coupon becomes due and payable. File state income tax It does not matter when you mail the coupon for payment. File state income tax How To Report Interest Income Generally, you report all your taxable interest income on Form 1040, line 8a; Form 1040A, line 8a; or Form 1040EZ, line 2. File state income tax You cannot use Form 1040EZ if your taxable interest income is more than $1,500. File state income tax Instead, you must use Form 1040A or Form 1040. File state income tax Form 1040A. File state income tax   You must complete Schedule B (Form 1040A or 1040), Part I, if you file Form 1040A and any of the following are true. File state income tax Your taxable interest income is more than $1,500. File state income tax You are claiming the interest exclusion under the Education Savings Bond Program (discussed earlier). File state income tax You received interest from a seller-financed mortgage, and the buyer used the property as a home. File state income tax You received a Form 1099-INT for U. File state income tax S. File state income tax savings bond interest that includes amounts you reported before 2013. File state income tax You received, as a nominee, interest that actually belongs to someone else. File state income tax You received a Form 1099-INT for interest on frozen deposits. File state income tax You are reporting OID in an amount less than the amount shown on Form 1099-OID. File state income tax You received a Form 1099-INT for interest on a bond you bought between interest payment dates. File state income tax You acquired taxable bonds after 1987 and choose to reduce interest income from the bonds by any amortizable bond premium (see Bond Premium Amortization in chapter 3 of Publication 550). File state income tax List each payer's name and the amount of interest income received from each payer on line 1. File state income tax If you received a Form 1099-INT or Form 1099-OID from a brokerage firm, list the brokerage firm as the payer. File state income tax   You cannot use Form 1040A if you must use Form 1040, as described next. File state income tax Form 1040. File state income tax   You must use Form 1040 instead of Form 1040A or Form 1040EZ if: You forfeited interest income because of the early withdrawal of a time deposit; You acquired taxable bonds after 1987, you choose to reduce interest income from the bonds by any amortizable bond premium, and you are deducting the excess of bond premium amortization for the accrual period over the qualified stated interest for the period (see Bond Premium Amortization in chapter 3 of Publication 550); or You received tax-exempt interest from private activity bonds issued after August 7, 1986. File state income tax Schedule B (Form 1040A or 1040). File state income tax   You must complete Schedule B (Form 1040A or 1040), Part I, if you file Form 1040 and any of the following apply. File state income tax Your taxable interest income is more than $1,500. File state income tax You are claiming the interest exclusion under the Education Savings Bond Program (discussed earlier). File state income tax You received interest from a seller-financed mortgage, and the buyer used the property as a home. File state income tax You received a Form 1099-INT for U. File state income tax S. File state income tax savings bond interest that includes amounts you reported before 2013. File state income tax You received, as a nominee, interest that actually belongs to someone else. File state income tax You received a Form 1099-INT for interest on frozen deposits. File state income tax You received a Form 1099-INT for interest on a bond you bought between interest payment dates. File state income tax You are reporting OID in an amount less than the amount shown on Form 1099-OID. File state income tax Statement (2) in the preceding list under Form 1040 is true. File state income tax In Part I, line 1, list each payer's name and the amount received from each. File state income tax If you received a Form 1099-INT or Form 1099-OID from a brokerage firm, list the brokerage firm as the payer. File state income tax Reporting tax-exempt interest. File state income tax   Total your tax-exempt interest (such as interest or accrued OID on certain state and municipal bonds, including tax-exempt interest on zero coupon municipal bonds) and exempt-interest dividends from a mutual fund as shown on Form 1099-INT, box 8, and on Form 1099-DIV, box 10. File state income tax Add these amounts to any other tax-exempt interest you received. File state income tax Report the total on line 8b of Form 1040A or 1040. File state income tax   If you file Form 1040EZ, enter “TEI” and the amount in the space to the left of line 2. File state income tax Do not add tax-exempt interest in the total on Form 1040EZ, line 2. File state income tax   Form 1099-INT, box 9, and Form 1099-DIV, box 11, show the tax-exempt interest subject to the alternative minimum tax on Form 6251. File state income tax These amounts are already included in the amounts on Form 1099-INT, box 8, and Form 1099-DIV, box 10. File state income tax Do not add the amounts in Form 1099-INT, box 9 and Form 1099-DIV, box 11 to, or subtract them from, the amounts on Form 1099-INT, box 8, and Form 1099-DIV, box 10. File state income tax    Do not report interest from an individual retirement account (IRA) as tax-exempt interest. File state income tax Form 1099-INT. File state income tax   Your taxable interest income, except for interest from U. File state income tax S. File state income tax savings bonds and Treasury obligations, is shown in box 1 of Form 1099-INT. File state income tax Add this amount to any other taxable interest income you received. File state income tax You must report all of your taxable interest income even if you do not receive a Form 1099-INT. File state income tax Generally, contact your financial institution if you do not receive a Form 1099-INT by February 15. File state income tax Your identifying number may be truncated on any paper Form 1099-INT you receive. File state income tax   If you forfeited interest income because of the early withdrawal of a time deposit, the deductible amount will be shown on Form 1099-INT in box 2. File state income tax See Penalty on early withdrawal of savings in chapter 1 of Publication 550. File state income tax   Box 3 of Form 1099-INT shows the interest income you received from U. File state income tax S. File state income tax savings bonds, Treasury bills, Treasury notes, and Treasury bonds. File state income tax Add the amount shown in box 3 to any other taxable interest income you received, unless part of the amount in box 3 was previously included in your interest income. File state income tax If part of the amount shown in box 3 was previously included in your interest income, see U. File state income tax S. File state income tax savings bond interest previously reported , later. File state income tax   Box 4 of Form 1099-INT will contain an amount if you were subject to backup withholding. File state income tax Report the amount from box 4 on Form 1040EZ, line 7; on Form 1040A, line 36; or Form 1040, line 62 (federal income tax withheld). File state income tax   Box 5 of Form 1099-INT shows investment expenses you may be able to deduct as an itemized deduction. File state income tax See chapter 28 for more information about investment expenses. File state income tax   If there are entries in boxes 6 and 7 of Form 1099-INT, you must file Form 1040. File state income tax You may be able to take a credit for the amount shown in box 6 unless you deduct this amount on line 8 of Schedule A (Form 1040). File state income tax To take the credit, you may have to file Form 1116, Foreign Tax Credit. File state income tax For more information, see Publication 514, Foreign Tax Credit for Individuals. File state income tax U. File state income tax S. File state income tax savings bond interest previously reported. File state income tax   If you received a Form 1099-INT for U. File state income tax S. File state income tax savings bond interest, the form may show interest you do not have to report. File state income tax See Form 1099-INT for U. File state income tax S. File state income tax savings bonds interest , earlier, under U. File state income tax S. File state income tax Savings Bonds. File state income tax   On Schedule B (Form 1040A or 1040), Part I, line 1, report all the interest shown on your Form 1099-INT. File state income tax Then follow these steps. File state income tax Several lines above line 2, enter a subtotal of all interest listed on line 1. File state income tax Below the subtotal enter “U. File state income tax S. File state income tax Savings Bond Interest Previously Reported” and enter amounts previously reported or interest accrued before you received the bond. File state income tax Subtract these amounts from the subtotal and enter the result on line 2. File state income tax More information. File state income tax   For more information about how to report interest income, see chapter 1 of Publication 550 or the instructions for the form you must file. File state income tax Prev  Up  Next   Home   More Online Publications