You only file taxes on savings account interest if your total interest earned reaches a reporting threshold, which varies by filing status and age
The IRS requires you to report interest income on your tax return, but only when the amount crosses a minimum threshold. For most people under 65, that threshold is $1,300 in interest for the 2024 tax year. If your savings account earned less than that, you do not have to file a federal tax return solely because of the interest — though you may have other reasons to file.
Your bank will send you a Form 1099-INT in January if you earned $10 or more in interest during the previous year. This form shows the IRS exactly how much interest you made. Even if you do not receive a 1099-INT because your interest was under $10, you still owe tax on it if you earned any — you just do not have to report it on a return if you fall below the filing threshold.
The threshold amount changes each year and depends on your age and filing status. If you are 65 or older, the threshold is higher. If you are married filing jointly, it is higher than if you file single. Check the IRS website or your tax software each year for the current threshold that applies to you.
Key Takeaways
- You must report savings account interest on your tax return only if it exceeds the annual threshold for your filing status, which is $1,300 for most people under 65 in 2024.
- Your bank sends a Form 1099-INT to both you and the IRS when you earn $10 or more in interest, so the IRS already knows about your interest income.
- Interest earned below the filing threshold still technically owes tax, but you are not required to file a return to report it unless you have other income that pushes you over the threshold.
- The filing threshold increases if you are 65 or older or if you file as married filing jointly, so check the current year's threshold before deciding whether to file.
How the IRS knows about your savings interest
Banks report interest to the IRS automatically through Form 1099-INT. If you earned $10 or more in interest during the year, your bank must send you a copy and file a copy with the IRS. This happens in late January or early February of the following year.
The IRS matches the 1099-INT your bank files with the income you report on your tax return. If you do not report the interest and the amounts do not match, the IRS will notice. This does not mean you will automatically face penalties — the IRS has procedures for small discrepancies — but it can trigger a notice asking you to explain the difference.
Even if your interest is under $10 and your bank does not send a 1099-INT, you still owe tax on it. The reporting threshold and the filing threshold are different things. You may owe tax on interest your bank never reported to the IRS.
When you must file even with low interest income
You may have to file a tax return even if your interest income is below the threshold, depending on your other income. If you have wages from a job, self-employment income, or other sources, those amounts count toward your total filing requirement.
For example, if you earned $800 in interest and $600 in wages, your total income is $1,400, which exceeds the $1,300 threshold for most single filers under 65. You would need to file a return to report both the wages and the interest.
Some people file even when they are not required to because they are due a refund. If your employer withheld taxes from your paycheck, filing a return may get you money back. The interest income does not change this — you still report it on the return you file for other reasons.
Interest from different types of savings accounts
All interest counts the same way for tax purposes, regardless of the account type. Interest from a regular savings account, a money market account, a certificate of deposit (CD), or a high-yield savings account all gets reported on Form 1099-INT and all must be reported on your tax return if you cross the threshold.
Some accounts earn interest monthly, some quarterly, some annually. The timing does not matter — what matters is the total interest you earned during the calendar year, January through December. Add up all the 1099-INT forms your banks send you to find your total interest income.
If you have multiple savings accounts at different banks, each bank sends its own 1099-INT. You report the total of all of them on your tax return, not each one separately.
How interest income affects other tax situations
Interest income can affect whether you may have access to for certain tax credits or deductions. Some credits, like the Earned Income Tax Credit (EITC), have income limits. Interest counts as income for these purposes, so high interest earnings could reduce or eliminate a credit you would otherwise receive.
If you are claimed as a dependent on someone else's return, your interest income counts toward the threshold for whether you must file your own return. The threshold is lower for dependents than for independent filers.
Interest income does not affect Social Security taxes or Medicare taxes — those only explore to wages and self-employment income. But it does count as income for determining whether your Social Security benefits are taxable.
What to do if you earned interest but did not receive a 1099-INT
If you earned interest but your bank did not send you a 1099-INT, contact the bank and ask for one. Banks are required to send them when interest reaches $10, so if you earned more than that and did not receive a form, the bank may have made an error.
If the bank confirms you earned less than $10 in interest, you still owe tax on it if you file a return for other reasons. Report the interest on your return even without a 1099-INT — you can find the amount in your account statements or online banking portal.
Keep your own records of interest earned. Your bank statements show the interest credited each month. If there is ever a discrepancy between what you report and what the IRS received, your statements are your proof of what you actually earned.
Frequently Asked Questions
Do I have to report interest if I earned less than $10?
Your bank does not have to send a 1099-INT for interest under $10, but you still owe tax on it. You only avoid filing a return if your total income stays below the threshold for your filing status. If you file a return for other reasons, report the interest even if it is under $10.
What if I earned interest in two different states?
You report all interest on your federal return regardless of which state it came from. Some states also tax interest income, and the rules vary by state. Check your state's tax rules to see whether you owe state tax on the interest in addition to federal tax.
Can I deduct any expenses related to my savings account?
No. Interest income is reported as-is with no deductions. You cannot deduct account fees, the cost of a safe deposit box, or any other expenses related to earning the interest. Report the gross interest your bank shows on the 1099-INT.
Does interest from a joint savings account get split between owners for tax purposes?
Not automatically. The bank reports the full interest amount on a 1099-INT to whoever the account is registered under. If the account is truly owned equally by two people, you may need to split the interest between you for tax purposes, but the bank does not do this automatically. Discuss with a tax professional how to handle this on your return.
What happens if I report my interest wrong on my tax return?
If you underreport interest, the IRS will likely catch it when comparing your return to the 1099-INT your bank filed. The IRS may send you a notice asking you to pay the tax owed plus interest on the unpaid amount. Penalties explore if the underreporting was intentional, but honest mistakes are usually handled with just the back taxes and interest owed.