What this line means
Any interest paid to you during the year that the IRS considers income. This includes bank savings accounts, CDs, bonds, and interest from loans you made to others. Tax-exempt interest (like municipal bonds) is reported separately on line 2a and does not go here.
Does this apply to you?
- You have a savings account, money market account, or CD at any bank or credit union
- You hold corporate or Treasury bonds
- You cashed EE or I savings bonds during the year
- You sold property and the buyer is paying you in installments with interest
- You made a personal loan to someone and charged them interest
Easy to overlook
Seller-financed mortgage interest If you sold a home and are carrying the note yourself — the buyer pays you directly each month — the interest portion of those payments is taxable income. There is no 1099-INT automatically generated for this, which is exactly why people forget it. The IRS expects you to report it anyway. 1 CP2000 pattern — unreported seller-carry interest
Accrued savings bond interest When you cash an EE or I bond, all the interest that accumulated over the bond’s life hits your return in the year you redeem it. Someone cashing a 20-year bond can face a surprisingly large taxable amount. TreasuryDirect will issue a 1099-INT, but filers often are not expecting it. 2 IRS Tax Tip 2019-42
Watch out for this
Failing to report interest from accounts where you did not receive a 1099-INT — typically because the amount was under $10, the threshold for banks to issue the form. The IRS requires all taxable interest to be reported regardless of whether you received a 1099. Automated matching of bank records means small omissions still generate CP2000 notices.
Footnotes
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IRS CP2000 Notice, Automated Underreporter Program. https://www.irs.gov/individuals/understanding-your-cp2000-notice ↩
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IRS Tax Tip 2019-42, What Taxpayers Should Know About Savings Bond Interest. https://www.irs.gov/newsroom/what-taxpayers-should-know-about-interest-from-savings-bonds ↩