If you are receiving interest income from US Treasury bills, bonds, or notes, through Treasury Direct, the 1099-INT form is automatically generated a few weeks into each new calendar year. Pay close attention, because the interest you earn will be placed in the column of transactions that corresponds to **Box 3** , not **Box 1**. Box 3 income is free of state income taxes, whereas Box 1 income is just like a regular bank account and will get taxed by the state (if there is a state income tax).
