Form 1099-OID: Original Issue Discount is an IRS document you receive when you must include an amount of original issue discount as taxable income. OID applies to certain debt instruments, U.S. savings bonds, and other deposits with terms longer than one year. Holders of Form 1099-OID must know how to report OID income correctly.
What is Form 1099-OID?
Form 1099-OID: Original Issue Discount is an IRS form used to report Original Issue Discount (OID) interest which is an excess of an obligation’s stated redemption price at maturity over its issue price. Debt instruments that may have OID include bonds, debentures, notes, or certificates with a term of more than one year. Form 1099-OID is issued to you if you have reportable OID interest and the IRS threshold is 10, or if foreign tax has been withheld, or if federal income tax has been withheld from your OID. You do not need to submit the form when filing but need to keep it for your records.
IRS Form 1099-OID – Who Needs to Fill It Out?
If you are holding bonds and other long-term debt instruments and their stated redemption prices are greater than their issue prices, you may be required to fill out IRS Form 1099-OID: Original Issue Discount. This form allows you to report the Original Issue Discount (OID) that must be included in your taxable income. The amount of OID required to be reported is set by the IRS at a minimum of $10, and backed up withholding rules will apply even if the amount of OID is lower than this threshold. You will need to include all account numbers and taxpayer identification numbers on the 1099-OID form, and both electronic and fill-in-form options are available. It is important to understand and complete this form correctly, as it is necessary for income reporting.
Step-by-Step: Form 1099-OID Instructions For Filling Out the Document
You may receive Form 1099-OID if you have OID income of at least $10, or if any federal income tax has been withheld. This form gives details on the OID for the part of the year you held the debt, reported as interest income. It will also include your account number and part of your taxpayer identification number. You do not need to submit the form when you file, but must hold onto it and report it on your tax return. You may need to make adjustments for premium, acquisition premium, or market discount if you purchased an instrument after its original issue, and special filing instructions may apply depending on the type and issue date of your debt.
Below, we present a table that will help you understand how to fill out Form 1099-OID.
|Information Required for Form 1099-OID||Details|
|Recipient Name||Your full name|
|Recipient Address||Your current mailing address|
|Taxpayer Identification Number (TIN)||Your unique identification number (e.g., Social Security Number)|
|Minimum OID Income||At least $10 in OID income|
|Federal Income Tax Withheld||If any federal income tax has been withheld|
|Form Content||Details on OID income and part of the year you held the debt|
|Account Number||Your account number related to the OID|
|Reporting Requirement||Do not submit the form when filing, but keep it for tax return reporting|
|Adjustments||Possible adjustments for premium, acquisition premium, or market discount|
|Special Instructions||Special filing instructions based on debt type and issue date|
Do You Need to File Form 1099-OID Each Year?
If you have reportable original issue discount interest and are sent the 1099-OID form by the holder of the debt, then you will need to file this form every year. The form is needed whether the amount of OID is more or less than the IRS threshold of $10, or whether the provider of the form has withheld or paid foreign tax on the OID for you. It is also necessary to file if you had withheld and haven’t had refunded federal income tax under the backup withholding rules. Rules differ depending on whether the instrument was issued after July 1, 1982, after 1984, after August 12, 1996, or after January 5, 1997, so you should work with a tax preparer or expert to understand your filing obligations.
Download the official IRS Form 1099-OID PDF
On the official IRS website, you will find a link to download Form 1099-OID: Original Issue Discount. However, to make it easier for you, we are providing the link in our article, which comes directly from the official irs.gov website! Click to download: Form 1099-OID