I received a 1099 INT for interest on a SEP IRA. I did not withdraw but reinvested. Do I need to claim as Interest ORis it deferred until withdraw it?

All earnings (interest and dividends) on a qualified retirement account such as a SEP IRA are tax-deferred until they are distributed. You do not report this form 1099-INT on your tax return.

should they have sent me a 1099 R and should I tell them? Should I be concerned this was reported to IRS on 1099 INT?

OR was it correct they sent the 1099 INT?

They are correct in sending you form 1099-INT. If the recipient of the interest is your SEP IRA account, the IRS knows that this is tax-deferred. You only receive a form 1099-R if you made a withdrawal from your SEP IRA account.

thank you!

You're welcome!

Under no circumstances should your SEP-IRA custodian be issuing to you a Form 1099-INT related to investments in a SEP-IRA account.  I would question whether or not this account is actually a SEP-IRA.  Contact the custodian of the account to investigate the error by the custodian.