US Treasury Interest from 1099-INT in Box 1 or Box 3 or both?

Forum|Forum|3 years ago
March 7, 2023
3 replies
18 views

Greetings. I see a couple of answered questions on this subject, but they do not address this question. My 1099-INT (from holding a US Treasury Bond) has a $$ in Box "Total Interest Paid or Credited". Do I enter this amount into both box 1 and 3, or just Box 3 (US Treasury Interest)?

1099

MinhT1

Level 15

You will enter the amount in box 3 of form 1099-INT in only box 3 of the TurboTax entry form. Do not enter it in Box 1.

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robtm

Level 10

T-Bond interest per instructions on 1099-int for line 3 says 'This interest is not included in Line 1'. Therefore it would be entered in Line 3 only.

surfgoodAuthor

Level 2

Awesome, thanks for the quick reply.

Winlife

Level 2

HELP! So why is the tax so different? If I enter my Treasury Notes $8400 interest in box 3 from my 1099-R, I get back $1600 LESS than entering the SAME amount in Box 1 instead (let's ignore the whole state tax stuff). Is treasury interest taxed at a much higher rate or something on short term Treasury notes? I am totally baffled what is going on and searching on the internet has produced no answers. I wondered if TurboTax had an error or something? Or is there a reason other than the state taxation that Box 3 was created? Note: I always held them to maturity, but bought 3-12 month "bonds".

DaveF1006

Level 15

I assume you mean a 1099 INT rather than a 1099R. If you reported this in Box 3 of a 1099R then your amounts will be much greater if you report these in Box 3. If you reported these in a 1099R, remove the entries and report in a 1099 INT

Reporting these in a 1099 INT, the amounts should not differ. These are still tax at the ordinary tax rates.

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Winlife

Level 2

Thanks. I meant 1099-Int. Thanks for the reply. I am still at wits end trying to figure this out though. Totally different amounts calculated as taxes if I put it in box 1 versus box 3 in the 1099-Int form in Turbo Tax (making sure it is freshly calculated each time). I only found this out because the first time through I accidently put my Treasury interest in box 1 and caught it during my final review. When I switched it to the correct box thinking it only mattered because of different states handling of it my federal taxes varied a huge amount. Any ideas of this being anything but a software error? I double checked to make sure I was using a 1099-INT ( where Turbo Tax hides all boxes except Box 1 and you have to check the box to show Box 3).