Is interest paid on a CD taxable?

[dosmagana]

Is interest that accrues on a Certificate of Deposit taxable.  The only notice I received was a letter and not a 1099DIV. I tought that it was taxed when the CD was redeemed.

[Rachel_W · Accepted solution]

Yes, interest that is *paid* on a CD is taxable in the year that it is paid (not accrued).  You should receive a Form 1099-INT from the bank reporting any interest paid on your CD. 

If you have not received this form, you may want to contact your bank to get a duplicate or an explanation as to why they didn't issue one to you.