No, Treasury Direct will issue the 1099-INT in the year that your redeem your bonds. The 1099-INT will include all of the interest the bond earned over its lifetime.
You have two options for reporting savings bond interest:
- Method 1. Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature.
- Method 2. Choose to report the increase in redemption value as interest each year.
If you choose Method 2, you must report all of your savings bond interest this way and keep doing it every year. If you want to change your method, you have to ask the IRS for permission to do so. The method you use applies to all of your savings bonds.
If you choose Method 2, you will still get a 1099-INT with all of the savings bond interest in the year of redemption. You will need to adjust your interest by the amount that was already taxed.
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