Yes, you must report interest earned on savings accounts to the IRS if the total reaches a certain threshold

The IRS requires you to report interest income on your federal tax return if you earned more than $10 of interest in a calendar year. Your bank will send you a Form 1099-INT in January showing all interest paid to you during the previous year. Even if you don't receive the form or the amount seems small, the IRS has a record of it—your bank reports the same information directly to them.

This applies to all types of savings accounts: regular savings, money market accounts, certificates of deposit (CDs), and high-yield savings accounts. The interest threshold of $10 is federal; some states have their own reporting rules that may differ, but federal reporting is what matters for your tax return.

If you earned interest but didn't receive a 1099-INT, you still owe tax on it. The form is a courtesy notification, not a requirement for the income to be taxable. Report the interest on Schedule 1 (Form 1040) under "Interest" when you file your return.

Key Takeaways

  • Report all interest income over $10 per year on your federal tax return, even if your bank doesn't send you a 1099-INT.
  • Banks send 1099-INT forms by January 31 for interest paid during the previous calendar year.
  • Interest from savings accounts, money market accounts, and CDs all count toward the $10 threshold.
  • The IRS receives a copy of your 1099-INT directly from your bank, so unreported interest will likely be flagged.
  • Report interest on Schedule 1 of Form 1040 when you file your tax return.

How the IRS knows about your interest income

Your bank is required by law to report interest payments to the IRS using Form 1099-INT. The bank sends one copy to you and another directly to the IRS. This happens automatically—you don't have to do anything to trigger it. The IRS matches the 1099-INT they receive from your bank against the income you report on your tax return.

If you report less interest than what appears on the 1099-INT sent to the IRS, or if you don't report it at all, the IRS will notice the discrepancy. This can trigger a notice asking you to explain the difference, or in some cases, the IRS may assess additional tax and penalties without asking first.

Even if you close the account before the end of the year, the interest earned up to that point still counts and will still be reported on a 1099-INT.

When you might not receive a 1099-INT

Banks are only required to send a 1099-INT if interest exceeds $10 in the calendar year. If you earned $8 in interest, your bank will not send you a form. However, you still owe tax on that $8—you must report it on your return even without the form.

Some banks also fail to send forms by mistake or due to outdated contact information. If you know you earned interest but didn't receive a 1099-INT by early February, contact your bank and ask them to send it or provide a statement showing the interest paid. You can then use that statement to report the income yourself.

How interest income affects your taxes

Interest is taxed as ordinary income at your regular tax rate, which depends on your total income and filing status. A small amount of interest might not change your tax bracket, but it still counts toward your total taxable income. This can affect other tax calculations, such as whether you owe the net investment income tax (an additional 3.8% tax on certain investment income for higher earners) or whether you remain under income limits for other tax credits.

If you have very little other income, the interest might not result in any additional tax owed. But you still must report it on your return. The IRS will calculate what you owe based on all your income combined.

Multiple accounts and joint accounts

If you have interest in multiple savings accounts, add all of it together to determine whether you've crossed the $10 threshold. Each bank reports separately on their own 1099-INT, but you report the combined total on your tax return.

On a joint account, the bank typically reports all the interest to both account holders unless you've provided written instructions otherwise. If you and another person own the account jointly, you may need to split the reported interest between you based on your actual ownership share. Discuss this with the other account holder and keep documentation of how you divided it, in case the IRS asks.

What to do if you earned interest but lost the 1099-INT

If your 1099-INT was lost or destroyed, contact your bank and request a duplicate. Banks keep records and can reissue the form. Provide them with your account number and the year in question. They typically send it within a few business days.

If you can't get a duplicate from the bank, you can still file your return using your own records—a bank statement showing the interest paid, or a year-end summary from your online banking portal. Report the interest amount on Schedule 1 and keep your documentation in case the IRS asks for proof later.

Frequently Asked Questions

Do I have to report interest if I earned less than $10?

No, banks don't send a 1099-INT for interest under $10. However, you still owe tax on it if you earned it. Report it on your return using your own records if you have them, or contact your bank for a statement showing the exact amount.

What if I moved and didn't get my 1099-INT?

Contact your bank with your current address and ask them to reissue the form or send it to your new address. If the bank already mailed it to your old address, they can confirm the amount and send a duplicate. You can also file your return based on your bank statements and report the interest yourself.

Can I get in trouble for not reporting interest?

Yes. The IRS receives a copy of your 1099-INT from the bank, so unreported interest will likely be discovered. This can result in a notice, additional tax owed, and penalties. Reporting the interest, even if you owe tax on it, is always safer than omitting it.

Does interest from a CD count the same way as a savings account?

Yes. Interest from CDs, money market accounts, and all other savings vehicles is reported on a 1099-INT and must be reported on your tax return if it exceeds $10 in the year. The rules are identical regardless of account type.

What if my bank reports interest I didn't actually receive?

Contact your bank immediately. If interest was credited to your account and then reversed, or if there's an error in the amount reported, ask the bank to issue a corrected 1099-INT. The bank will also send a corrected form to the IRS. Do not file your return until this is resolved, or file an amended return once you have the corrected form.