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
Treasury can withhold some of your interest payments to help defray your tax burden. We'll transfer your withholdings to the IRS and report the withheld amount on Form 1099 – I N T under “Federal Income Tax Withheld.” TreasuryDirect. Simply access your account and schedule the percentage you want withheld.
How do I make sure I have enough tax withholding? ›
Use the Tax Withholding Estimator on IRS.gov. The Tax Withholding Estimator works for most employees by helping them determine whether they need to give their employer a new Form W-4. They can use their results from the estimator to help fill out the form and adjust their income tax withholding.
What should I put on my tax withholding form? ›
You'll need to provide your name, address, filing status, and Social Security number. Your employer needs your Social Security number so that when it sends the money it withheld from your paycheck to the IRS, the payment is appropriately applied toward your annual income tax bill.
Where to find tax forms on TreasuryDirect? ›
Log in to your TreasuryDirect account. Click the “Manage Direct” tab. Under “Manage My Taxes,” click “Year XXXX” Near the top of the “Taxable Transaction(s) Summary” page, click “View your 1099 for tax year XXXX”
What are the disadvantages of TreasuryDirect? ›
Securities purchased through TreasuryDirect cannot be sold in the secondary market before they mature. This lack of liquidity could be a disadvantage for investors who may need to access their investment capital before the securities' maturity.
What is the 45 day rule for TreasuryDirect? ›
TreasuryDirect requires Treasury marketable securities be held for 45 days following original issue before they may be transferred. 4-Week Bills bought at original issue in TreasuryDirect may not be transferred at all because the term of the security is less than 45 days.
Can you get in trouble for not withholding enough taxes? ›
An underpayment penalty is a fine charged by the Internal Revenue Service (IRS) when taxpayers don't pay enough of their estimated taxes due during the year, don't have enough withheld from their wages during the year, or pay late.
What happens if I didn't withhold enough taxes? ›
Check your withholding
Too little can lead to a tax bill or penalty. Too much can mean you won't have use of the money until you receive a tax refund.
What percent should my tax withholding be? ›
Generally, you want about 90% of your estimated income taxes withheld and sent to the government. 12 This ensures that you never fall behind on income taxes (something that can result in heavy penalties) and that you are not overtaxed throughout the year.
Which tax withholding status should I choose? ›
Single: W-4 Single status should be used if you are not married and have no dependents. Married: W-4 married status should be used if you are married and are filing jointly.
Claiming 1 reduces the amount of taxes that are withheld from weekly paychecks, so you get more money now with a smaller refund. Claiming 0 allowances may be a better option if you'd rather receive a larger lump sum of money in the form of your tax refund.
What is the correct withholding tax? ›
Your payer must take 7% from your California income. Backup withholding: Replaces all other types of withholding. Cannot be reduced or waived.
How do I withhold taxes in my TreasuryDirect account? ›
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.
Will TreasuryDirect send me a 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.
What tax form do I use for bonds? ›
You get a Form 1099-INT for the year in which you get the interest. (INT stands for "interest." The 1099-INT tells you how much interest the bond earned.)
How do taxes work on Treasury bonds? ›
Bonds typically pay a fixed amount of interest (usually paid twice per year). 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.
Are taxes withheld when cashing in savings bonds? ›
The redemption proceeds of United States Retirement Plan Bonds or Individual Retirement Bonds you have submitted for redemption are subject to Federal income tax withholding unless you elect not to have withholding apply.
Do brokerage accounts withhold taxes? ›
Taxable bank or brokerage accounts: In most instances, taxes are not withheld from capital gains, distributions, or other income generated from such accounts.
Do you pay federal taxes on Ibonds? ›
Interest earned on I bonds is exempt from state and local tax but subject to federal tax. The interest is taxed in the year the bond is redeemed or reaches maturity, whichever comes first.
