No, the accrued market discount is not reported each year on Treasury Bills purchased at a discount. Market discount only becomes taxable in the year the bond is sold or redeemed. Also unlike OID, market discount is taxable income regardless of the tax-exempt nature of a bond's interest income at maturity/redemption.
Accrued market discount is the gain in the value of a discount bond expected from holding it for any duration until its maturity. Because discount bonds are sold below face value, it is expected that they will gradually rise in market price until reaching maturity.
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