Yes, her mother can file using e-file and does not need to paper file. The information below will explain how to issue a 1099-INT and 1096 to the IRS to assign part of the interest to your wife.
How do I amend my federal tax return for this year?
How do I amend a tax return for a prior year?
Nominee Returns. This is how the IRS knows what you are doing. This will be done by mail and not through your tax return or e-file.
Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received). You must also furnish a Form 1099 to each of the other owners.
File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)
- On each new Form 1099, list mother as the payer and the other owner, as the recipient. On Form 1096, list your mother as the nominee filer, not the original payer. The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.
The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here:
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