Usually, banks or financial institutions where your CD was held would issue the 1099-INT form so not sure why you as a customer would issue a 1099-INT. I'd recommend contacting the financial institution or bank where the CD was held to find out whether they would be planning to issue a corrected 1099-INT for the tax year where the penalty was initially assessed or if they will issue a 1099-INT for the year when the penalty was reversed.
Since tax returns are typically prepared on the cash basis, it would make sense that they would issue a 1099-INT for the year of repayment, but verifying with the bank is your best way to confirm.
@natashamorales17
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