Since the Form 1099-INT is reported under your social security
number, then it should be included on your tax return. You
could then subtract the amount from your return by showing it was nominee
interest.
To do so within TurboTax, use these steps to revisit the
interest section of your tax return:
- On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
This opens a box where
you can type in “1099-INT” (be sure to enter exactly as shown here) and
click the magnifying glass (or for CD/downloaded TurboTax, click Find)
The search results will
give you an option to “Jump to 1099-INT”
-
Click on the blue “Jump to 1099-INT” link
This will bring you to a summary of interest forms already
entered. If you have already entered the interest in your return, click Edit
beside the one with the nominee amount. If you have not already entered
the interest in your return, keep reading for steps to take after entering the
information. Follow these steps:
After you click Continue
when you have finished entering the information from your Form 1099-INT,
the next screen is titled “Tell us if any of these uncommon situation apply
to you”
The second choice on this
screen is “I need to adjust my taxable amount”
Check this box and click Continue
Then you will see a
screen titled “Report Interest adjustment”
- Enter the amount as a positive number and the reason for the adjustment. This will make the proper entry on your Schedule B.
Also, take a look at the IRS Topic 403 – Interest Received for more details about the next step to take so that the actual
owner of the interest is properly notified.
To strictly follow the next steps, a 1099 should be issued to
your grandson to report the interest, but it may not cause any issues if he simply reports the interest on his
tax return without the actual form issued in his name.
Also see Filing Tax Form 1099-INT for more information.
