You only file a savings account on your tax return if the interest it earned meets the IRS threshold, which is $10 for the 2023 tax year.

Your bank sends you a 1099-INT form if your account earned $10 or more in interest during the year. That form arrives by January 31 and tells you exactly how much interest to report. If you earned less than $10, the bank does not send a form, and you do not have to report it on your federal tax return.

The threshold can change year to year, so check the IRS website or your bank's year-end statement to confirm the current amount. Some states have their own thresholds for state tax returns, which may be lower than the federal amount.

Key Takeaways

  • The IRS requires you to report savings account interest only if it reaches $10 or more in a calendar year, though your bank will send you a 1099-INT form to document it.
  • You report the interest amount on Schedule 1 (Form 1040) under "Interest" — not the savings account itself, only the income it generated.
  • If your bank does not send a 1099-INT but you earned interest, you still report what you earned based on your own records or bank statements.
  • Some states tax savings interest at a lower threshold than the federal $10, so check your state's rules if you file a state return.
  • High-yield savings accounts and money market accounts follow the same 1099-INT reporting rule as traditional savings accounts.

What the 1099-INT form tells you

The 1099-INT lists the total interest your account earned in the calendar year. Box 1 shows the interest income you owe tax on. If you have multiple savings accounts at different banks, you will receive a separate 1099-INT from each one, and you add them all together when you file.

Keep the 1099-INT with your tax records. You do not mail it to the IRS — your bank sends a copy directly to them. You use it to fill in your own return accurately, and the IRS matches what you report against what the bank reported.

How to report savings interest on your tax return

On Form 1040, you report interest income on Schedule 1, Line 8 (or the current year's equivalent line). Add up all interest from all your 1099-INT forms and enter the total. If you earned less than $10 from all accounts combined and received no 1099-INT forms, you still report the interest if you have records of it — the threshold only determines whether the bank sends a form, not whether you owe tax on the income.

If you file electronically, tax software will walk you through entering the 1099-INT information. If you file by paper, copy the amounts from your 1099-INT forms onto the appropriate lines.

When you have multiple savings accounts

Each bank or financial institution sends its own 1099-INT if that account earned $10 or more. You add all the interest amounts together and report the total on your return. If one account earned $8 and another earned $7, neither bank sends a form, but you still report the combined $15 if you have records of it.

High-yield savings accounts, money market accounts, and certificates of deposit (CDs) all generate 1099-INT forms the same way. The account type does not matter — only whether the interest crossed the reporting threshold.

State tax reporting requirements

Most states that tax income also tax savings interest, but some have lower thresholds than the federal $10. A few states do not tax interest income at all. Check your state's tax agency website or ask your tax preparer what your state requires.

If you live in a state with no income tax (like Florida, Texas, or Wyoming), you do not file a state return and do not report savings interest to the state. If you moved during the year, you may owe tax to both your old state and your new state, and each may have different rules.

What happens if you do not report the interest

The IRS receives a copy of your 1099-INT from your bank. If you do not report the interest on your return, the IRS will notice the mismatch and may send you a notice asking for the missing income and any tax owed, plus penalties and interest. The penalty for not reporting is usually 20 percent of the unpaid tax.

If the interest is small — under $100 — the IRS often does not pursue it, but you cannot count on that. It is simpler and safer to report it when you file.

Frequently Asked Questions

Do I have to report a savings account I opened but never used?

No. You only report interest income, not the account itself. An unused account with a zero balance generates no interest and no 1099-INT form. Once you deposit money and it earns interest, you report the interest if it meets the threshold.

What if my bank made an error on the 1099-INT?

Contact your bank and ask them to issue a corrected form (called an amended 1099-INT). Once they send the corrected version to you and the IRS, file an amended return if you already filed. Keep records of the bank's error and correction in case the IRS questions the discrepancy.

Do I report savings interest if I am claimed as a dependent?

Yes, if the interest meets your filing threshold. Dependents have their own filing rules based on earned and unearned income. Savings interest counts as unearned income. Check IRS Publication 17 or ask a tax preparer whether you must file based on your total income.

Can I deduct savings account fees from the interest I report?

No. You report the full interest amount shown on the 1099-INT. Account fees are not deductible against interest income on your personal return, though they may reduce your net interest in practice.

What if I earned interest in a joint savings account?

The bank reports the full interest amount on a 1099-INT to the Social Security number listed as the account owner or primary holder. You and the co-owner must decide how to split the interest for tax purposes — usually 50/50, but it depends on how you funded and own the account. Report only your share on your return and keep records of the split.