Form 1099-OID

Form 1099-OID, Original Issue Discount, reports the amount of OID income that the taxpayer should report as income for the year. A copy of Form 1099-OID is also sent to the IRS.

Box 1 shows the amount of OID interest for the year if the taxpayer bought the obligation at its original issue and held the issue all year. Otherwise, box 1 reports the OID interest for the part of the year the taxpayer owned it.

Box 2 reports non-OID interest paid or credited on the obligation during the year.

The sum of boxes 1 and 2 are reported as taxable interest income on line 8a of Form 1040 or 1040A. Taxpayers must report OID income on Form 1040 if the amount is more or less than the amount shown on Form 1099-OID.

For more information, see the Volunteer Resource Guide (Tab 2), Income, Interest Statement for Schedule B, Line 1b, Interest Received.