What you earn from your Treasury marketable securities is subject to federal tax but is exempt from state and local taxes. This includes:
- interest you earn on notes, bonds, TIPS, and FRNs.
- Bill "interest" (the difference between the price you pay and the face value you get when the bill matures)
- inflation-protection gains or losses you may get during the year for a TIPS
IRS Form 1099 tells the IRS about interest and gains that may be subject to federal tax.
TreasuryDirect: Getting your IRS Form 1099
If your securities are in your TreasuryDirect account, your 1099 is available at the beginning of each year.
To see and print your Form 1099 from TreasuryDirect:
- Go to your TreasuryDirect account.
- Choose the ManageDirect tab.
- Under "Manage My Taxes", choose the relevant year.
- Near the top of your "Taxable Transaction Summary", choose the link to view your 1099.
NOTE: Your "Taxable Transaction Summary" is NOT your 1099.
Legacy Treasury Direct: Getting your IRS Form 1099
If you still have securities in Legacy Treasury Direct, we mail you a 1099 at the beginning of each year.
If you need a duplicate 1099-INT form for the current tax year, call 844-284-2676 (free call) or, from outside the United States, +1-304-480-6464.
To request 1099-INT forms for earlier tax years, write to us:
Treasury Retail Securities Services
P.O. Box 9150
Minneapolis, MN 55480-9150
Note: If you no longer have securities in Legacy Treasury Direct, please keep your address current with us until you receive your final tax statement.
Paying taxes early through withholding
If we hold your securities, we can ease your tax burden by withholding taxes for you during the year. Each time we pay interest, we can withhold part of the interest for taxes. The 1099 you get for that year will show what you earned and the amount we withheld for taxes.
We can withhold up to 50 percent of the interest you earn.
To withhold taxes:
- TreasuryDirect: In your TreasuryDirect account, tell us the percent to withhold.
- Legacy Treasury Direct: Call or write to us to tell us the percent to withhold. The phone number and address are in the section above.
What you will see on your IRS Form 1099
You get one 1099 for all your Treasury securities.
The 1099 has different sections for:
- 1099 – INT (Shows interest income you received through the year)
- 1099 – B (Shows the proceeds you got for maturing securities not purchased at original issue)
- 1099 – OID (Only for TIPS: shows any inflation-adjusted increase or decrease in the principal)
Each section is in chronological order and identifies each security by its Confirmation number and CUSIP number. The information in the 1099 – B section is divided into Covered and Non-Covered securities.
If you have notes, bonds, or TIPS with interest due on December 31
If December 31 is an interest pay date for your note, bond, or TIPS and it is a holiday or weekend, we pay the interest and report it being earned on the first business day of the new year.
This doesn't apply to FRNs because they never pay interest in December. They pay in January, April, July, and October.
If you have bills that mature on December 31
If your bill matures and is due to pay on December 31 and it is a holiday or weekend, we pay you on the first business day of the new year. However, we show the payment on your 1099-INT the day the bill matures, not the year it is paid.
If you have TIPS (Treasury Inflation-Protected Securities)
TIPS earn interest and the value of the principal may go up due to inflation or down due to deflation. The change over the course of a year may be a gain or a loss.
We report the change in principal for all TIPS you own on form 1099-OID.
We report the change each year, even if your TIPS hasn't matured and you haven't been paid.
FAQs
Paying taxes early through withholding
We can withhold up to 50 percent of the interest you earn. To withhold taxes: TreasuryDirect: In your TreasuryDirect account, tell us the percent to withhold. Legacy Treasury Direct: Call or write to us to tell us the percent to withhold.
Do you get tax forms from TreasuryDirect? ›
You'll receive your 1099 forms differently, depending on which system you have invested through. If you invest in TreasuryDirect, your 1099 will be available electronically and you can print the form from your account. 1099 forms are available by January 31 of each tax year.
Can I have taxes withheld when cashing I bonds? ›
TreasuryDirect does not withhold state taxes because I Bonds are exempt from state taxes. If you choose to have TreasuryDirect withhold taxes, the amount withheld for federal income tax will be in Box 4 of Form 1099-INT together with the interest amount in Box 3.
Do I need to report treasury bonds on my tax return? ›
Interest from corporate bonds and U.S. Treasury bonds interest is typically taxable at the federal level. U.S. Treasuries are exempt from state and local income taxes. Most interest income earned on municipal bonds is exempt from federal income taxes.
How do I manually withhold taxes? ›
Complete a new Form W-4, Employee's Withholding Allowance Certificate, and submit it to your employer. Complete a new Form W-4P, Withholding Certificate for Pension or Annuity Payments, and submit it to your payer. Make an additional or estimated tax payment to the IRS before the end of the year.
Do I pay taxes on TreasuryDirect I bonds? ›
The interest earned by purchasing and holding savings bonds is subject to federal tax at the time the bonds are redeemed. However, interest earned on savings bonds is not taxable at the state or local level.
How do I get tax forms for I bonds? ›
If your bonds are in your TreasuryDirect account, your 1099-INT is available in your account by January 31 of the following year.
- Go to your TreasuryDirect account.
- Select the ManageDirect tab.
- Under "Manage My Taxes", choose the relevant year.
You can skip paying taxes on interest earned with Series EE and Series I savings bonds if you're using the money to pay for qualified higher education costs. That includes expenses you pay for yourself, your spouse or a qualified dependent. Only certain qualified higher education costs are covered, including: Tuition.
Do you have to pay taxes on treasury bills? ›
Key Takeaways
Interest from Treasury bills (T-bills) is subject to federal income taxes but not state or local taxes. The interest income received in a year is recorded on Form 1099-INT. Investors can opt to have up to 50% of their Treasury bills' interest earnings automatically withheld.
Do you pay taxes on I bonds every year? ›
Must I pay tax on what the bond earns? You choose whether to report each year's earnings or wait to report all the earnings when you get the money for the bond. If you use the money for qualified higher education expenses, you may not have to pay tax on the earnings.
You can make a number of moves to ease the tax burden from savings account interest, which include:
- Investing in a tax-deferred account such as a traditional individual retirement account or a 401(k).
- Stashing money in a tax-exempt account such as a Roth 401(k) or a Roth IRA.
Business owners do not generally have to withhold or pay any taxes on payments to independent contractors.
How do taxes work on Treasury bonds? ›
Interest from Treasuries is generally taxable at the federal level, but not at the state level. Interest from munis is generally exempt from federal taxes, and if you live in the state where the bond was issued, the interest may also be exempt from state taxes.
How long does it take to get money from TreasuryDirect? ›
You just bought a security from the U.S. Treasury. Securities are generally issued to your account within two business days of the purchase date for savings bonds or within one week of the auction date for Bills, Notes, Bonds, FRNs, and TIPS.
Where do I report bonds on 1040? ›
You would report the interest on line 2b of Form 1040 and attach Schedule B if you earned $1,500 or more of interest. If you do cash the bonds in during the year they mature, and you used the bonds proceeds to pay for higher education, some of the interest may be exempt (see below).
Can you withhold taxes in a brokerage account? ›
Taxable bank or brokerage accounts: In most instances, taxes are not withheld from capital gains, distributions, or other income generated from such accounts. However, you may want to withhold more elsewhere or pay quarterly estimated taxes to help cover any tax liabilities produced by these assets.
Do you owe taxes on Treasury bills? ›
Key Takeaways
Interest from Treasury bills (T-bills) is subject to federal income taxes but not state or local taxes. The interest income received in a year is recorded on Form 1099-INT. Investors can opt to have up to 50% of their Treasury bills' interest earnings automatically withheld.
How to withdraw money from TreasuryDirect? ›
Log into your primary TreasuryDirect® account. Click on the ManageDirect tab at the top of the page. Click "Redeem securities" under the Manage My Securities heading. On the Redemption page, choose the radio button beside Zero-Percent C of I and click "Submit".
How do I put tax return on I bonds? ›
What do I need to do? When you file your tax return, include IRS Form 8888. Complete Part 2 to tell the IRS you want to use part (or all) of your refund to purchase paper I bonds.
