What you earn from your Treasury marketable securities is subject to federal tax but is exempt from state and local taxes. This includes:
- interest you earn on notes, bonds, TIPS, and FRNs.
- Bill "interest" (the difference between the price you pay and the face value you get when the bill matures)
- inflation-protection gains or losses you may get during the year for a TIPS
IRS Form 1099 tells the IRS about interest and gains that may be subject to federal tax.
TreasuryDirect: Getting your IRS Form 1099
If your securities are in your TreasuryDirect account, your 1099 is available at the beginning of each year.
To see and print your Form 1099 from TreasuryDirect:
- Go to your TreasuryDirect account.
- Choose the ManageDirect tab.
- Under "Manage My Taxes", choose the relevant year.
- Near the top of your "Taxable Transaction Summary", choose the link to view your 1099.
NOTE: Your "Taxable Transaction Summary" is NOT your 1099.
Legacy Treasury Direct: Getting your IRS Form 1099
If you still have securities in Legacy Treasury Direct, we mail you a 1099 at the beginning of each year.
If you need a duplicate 1099-INT form for the current tax year, call 844-284-2676 (free call) or, from outside the United States, +1-304-480-6464.
To request 1099-INT forms for earlier tax years, write to us:
Treasury Retail Securities Services
P.O. Box 9150
Minneapolis, MN 55480-9150
Note: If you no longer have securities in Legacy Treasury Direct, please keep your address current with us until you receive your final tax statement.
Paying taxes early through withholding
If we hold your securities, we can ease your tax burden by withholding taxes for you during the year. Each time we pay interest, we can withhold part of the interest for taxes. The 1099 you get for that year will show what you earned and the amount we withheld for taxes.
We can withhold up to 50 percent of the interest you earn.
To withhold taxes:
- TreasuryDirect: In your TreasuryDirect account, tell us the percent to withhold.
- Legacy Treasury Direct: Call or write to us to tell us the percent to withhold. The phone number and address are in the section above.
What you will see on your IRS Form 1099
You get one 1099 for all your Treasury securities.
The 1099 has different sections for:
- 1099 – INT (Shows interest income you received through the year)
- 1099 – B (Shows the proceeds you got for maturing securities not purchased at original issue)
- 1099 – OID (Only for TIPS: shows any inflation-adjusted increase or decrease in the principal)
Each section is in chronological order and identifies each security by its Confirmation number and CUSIP number. The information in the 1099 – B section is divided into Covered and Non-Covered securities.
If you have notes, bonds, or TIPS with interest due on December 31
If December 31 is an interest pay date for your note, bond, or TIPS and it is a holiday or weekend, we pay the interest and report it being earned on the first business day of the new year.
This doesn't apply to FRNs because they never pay interest in December. They pay in January, April, July, and October.
If you have bills that mature on December 31
If your bill matures and is due to pay on December 31 and it is a holiday or weekend, we pay you on the first business day of the new year. However, we show the payment on your 1099-INT the day the bill matures, not the year it is paid.
If you have TIPS (Treasury Inflation-Protected Securities)
TIPS earn interest and the value of the principal may go up due to inflation or down due to deflation. The change over the course of a year may be a gain or a loss.
We report the change in principal for all TIPS you own on form 1099-OID.
We report the change each year, even if your TIPS hasn't matured and you haven't been paid.
FAQs
If we hold your securities, we can ease your tax burden by withholding taxes for you during the year. Each time we pay interest, we can withhold part of the interest for taxes.
Do I need tax forms from TreasuryDirect? ›
TreasuryDirect (electronic securities)
We put a 1099 into your TreasuryDirect account if: You cash a savings bond in TreasuryDirect. (We don't provide a 1099 if you only buy or hold a savings bond.) You hold a marketable security in TreasuryDirect and the security earns interest.
Why is my employer not withholding enough federal taxes? ›
The amount of tax withheld from your pay depends on what you earn each pay period. It also depends on what information you gave your employer on Form W-4 when you started working. This information, like your filing status, can affect the tax rate used to calculate your withholding.
Can I have taxes withheld when cashing savings bonds? ›
Your redemption will be processed with or without withholding, as you elect. If you do not return this election form within 30 days of the date of the enclosed letter, your bonds will be redeemed and Federal income tax WILL BE WITHHELD from the redemption proceeds.
What are the disadvantages of TreasuryDirect? ›
Securities purchased through TreasuryDirect cannot be sold in the secondary market before they mature. This lack of liquidity could be a disadvantage for investors who may need to access their investment capital before the securities' maturity.
Do you pay taxes on income from Treasury bonds? ›
Bonds typically pay a fixed amount of interest (usually paid twice per year). Interest from corporate bonds and U.S. Treasury bonds interest is typically taxable at the federal level. U.S. Treasuries are exempt from state and local income taxes.
Do I need to report I bonds on my tax return? ›
I cashed some Series E, Series EE, and Series I savings bonds. How do I report the interest? In general, you must report the interest in income in the taxable year in which you redeemed the bonds to the extent you did not include the interest in income in a prior taxable year.
What happens if you don't report interest income? ›
If you receive a Form 1099-INT and do not report the interest on your tax return, the IRS will likely send you a CP2000, Underreported Income notice. This IRS notice will propose additional tax, penalties and interest on your interest payments and any other unreported income.
Do you get a 1099-INT from TreasuryDirect? ›
If your bonds are in your TreasuryDirect account, your 1099-INT is available in your account by January 31 of the following year.
Can you sue employer for not withholding enough taxes? ›
A. You can either file a wage claim with the Division of Labor Standards Enforcement (the Labor Commissioner's Office), or file a lawsuit in court against your employer to recover the lost wages.
Use the Tax Withholding Estimator on IRS.gov. The Tax Withholding Estimator works for most employees by helping them determine whether they need to give their employer a new Form W-4. They can use their results from the estimator to help fill out the form and adjust their income tax withholding.
Can you be penalized for not withholding enough taxes? ›
Alternatively, a full-time employee who fails to adjust his tax withholdings after a significant pay raise may not be paying enough in taxes throughout the year. Such discrepancies might result in a penalty at the end of the year, which could add to one's tax liability.
How do I withhold taxes on TreasuryDirect? ›
Re: where to adjust withholding at treasury direct
Account Info->Edit and it should be near the bottom. You'll be asked a security question so make sure you know the answer. Note that it's unusual to have taxes withheld on 1099-INT.
Do I pay taxes on I bonds if I don't cash out? ›
Yes, I bonds are subject to taxation. But they provide certain tax benefits that distinguish them from other investments and can result in lower tax payments. The original amount you invested in the bond isn't taxed, but the interest earned is.
How long does it take to get money from TreasuryDirect? ›
You just bought a security from the U.S. Treasury. Securities are generally issued to your account within two business days of the purchase date for savings bonds or within one week of the auction date for Bills, Notes, Bonds, FRNs, and TIPS.
Can the Department of Treasury take my tax refund? ›
The amount of my federal payment (e.g., income tax refund) has been reduced ("offset"). Why? If an individual owes money to the federal government because of a delinquent debt, the Treasury Department can offset that individual's federal payment or withhold the entire amount to satisfy the debt.
Do you have to pay taxes on iBond interest? ›
Interest on I bonds is exempt from state and local taxes but taxed at the federal level at ordinary income-tax rates.
Do brokerage accounts withhold taxes? ›
Taxable bank or brokerage accounts: In most instances, taxes are not withheld from capital gains, distributions, or other income generated from such accounts.
Does the Treasury Department collect taxes? ›
The Department of the Treasury manages federal finances by collecting taxes and paying bills and by managing currency, government accounts and public debt.
