I cashed in a $1000 Series I bond from May 2003 in August 2022. The interest earned was $951.20. I do not have a 1099-INT. What do I enter for "Payer" and Boxes 1 and 3?

[GeorgeM777]

Because the Department of the Treasury issues Series I bonds, you can designate the payer as the U.S. Department of the Treasury. However, you should not be filling out the 1099-INT because the Department of the Treasury will send you a 1099-INT.  

With a Series I bond, you report the interest when you file a federal income tax return for the year in which you actually get the interest. Thus, it would appear that you report this interest income on your 2022 tax return.

The interest earned by purchasing and holding savings bonds is subject to federal tax.  Thus, while your $951.20 is taxable at the federal level, it is not subject to state and local income taxes. 

@bs261

[VolvoGirl]

I believe you only put the interest amount in box 3, not box 1.  You can manually enter it without the 1099Int.  But if you do get a 1099 make sure it is the same amount in the same box.   You can put US Treasury or just I Bond interest as the payer.  

Or where did you cash it in?  I cashed in a bunch of bonds at Wells Fargo and was surprised WF sent me a 1099Int.  So I put Wells Fargo as the payer.  

[dmertz]

If this was an electronic I bond, you must log in to your TreasuryDirect account and download the Form 1099-INT.  TreasuryDirect does not mail these Forms 1099-INT, they only provide them by download.

If this was a paper bond cashed at a bank, the bank is responsible for issuing the Form 1099-INT.

VolvoGirl is correct, the savings bond interest is reported only in box 3.

[VolvoGirl]

@dmertz   1099 INT (not 1099R).

[dmertz]

Thanks, corrected.  Habits are hard to break.

[tractng]

I already filed my tax but just realized that I bought I bond of $2000 (purchased online on TreasuryDirect) on Oct of 2022.  Interest was only $16.  TreasuryDirect didn't list 2022 as a taxable year.   This is the first time I ever bought I bond.

So in theory, each year if one's interest is over a certain amount, they would get a downloadable form?  If so do you have to include the interest amount in each year's filing or wait until the I bond is cashed?   I read somewhere that one can elect cash or accrual method of filing.

Thanks,

TT

[JulieS]

No, Treasury Direct will issue the 1099-INT in the year that your redeem your bonds. The 1099-INT will include all of the interest the bond earned over its lifetime.

You have two options for reporting savings bond interest:

• Method 1. Postpone reporting the interest until the earlier of the year you cash or dispose of the bonds or the year in which they mature.
• Method 2. Choose to report the increase in redemption value as interest each year. 

If you choose Method 2, you must report all of your savings bond interest this way and keep doing it every year. If you want to change your method, you have to ask the IRS for permission to do so. The method you use applies to all of your savings bonds. 

If you choose Method 2, you will still get a 1099-INT with all of the savings bond interest in the year of redemption. You will need to adjust your interest by the amount that was already taxed. 

Click here for more details. 

[tractng]

So by default, it will be method 1?  In my case I don't have to report until its cashed/matured right?

[JulieS]

Yes, method 1 is the default and you don't have to report any interest income until you redeem the bond, or it matures, which ever comes first. 

[Angie-20]

So, do I understand correctly that the Interest received after cashing in a EE US 

Savings Bond in only taxable Federally and not by the State or Local Governments?  Is this true for all states as I live in Massachusetts?

[JulieS]

Yes, it is true for Massachusetts. Your federal savings bond interest is taxable on your federal return, but not on the MA state tax return. 

[RMD20201]

I received a 1099 for the US Treasury Savings EE Bonds. Why is my MA state tax still including the interest? I thought it is only taxable at the Federal level. What do I need to do to adjust it?

Thank you in advance.

[VolvoGirl]

@RMD20201   Did you enter the interest in box 3?  It will be automatically subtracted on the state return.  There is probably a separate page of adjustments.  

It goes in box 3.  To get to box 3. Under the Received from box, you need to check the little box on the left for
….My form has info in more than just box 1 (this is uncommon).

[RMD20201]

THANK YOU!!
I was just about to delete my message as I figured it out but greatly appreciate the quick response.