Federal Form 1099-Oid Instructions
For the latest information about developments related to Forms 1099-INT and 1099-OID and their instructions, such as legislation enacted after they were published, go to www.irs.gov/form1099int or www.irs.gov/form1099oid .
Nonresident aliens. Interest aggregating $10 or more paid to certain nonresident alien individuals is reportable on Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. See TD 9584, 2012-20 I.R.B. 900 available at www.irs.gov/irb/2012-20_IRB/ar07.html , for more information.
Truncating recipient's identification number on paper payee statements. Pursuant to proposed regulations §§ 1.6042-4(b) and 301.6109-4 (REG-148873-09), all filers of Forms 1099-INT and 1099-OID may truncate a recipient's identification number (social security number (SSN), individual taxpayer identification number (ITIN), or adoption taxpayer identification number (ATIN)) on payee statements. See part M in the 2013 General Instructions for Certain Information Returns.
In addition to these specific instructions, you should also use the 2013 General Instructions for Certain Information Returns. Those general instructions include information about the following topics.
- Backup withholding.
- Electronic reporting requirements.
- Who must file (nominee/middleman).
- When and where to file.
- Taxpayer identification numbers.
- Statements to recipients.
- Corrected and void returns.
- Other general topics.
Specific Instructions for Form 1099-OID
File Form 1099-OID, Original Issue Discount, if the original issue discount (OID) includible in gross income is at least $10 and you are any of the following:
- An issuer with any bond outstanding or other evidence of indebtedness in registered or bearer form issued with OID;
- An issuer of a certificate of deposit (CD) made, purchased, or renewed after 1970 if the CD has OID and a term of more than 1 year (see Caution on this page);
- A financial institution having other deposit arrangements, such as time deposits or bonus-savings plans, if the arrangements have OID and a term of more than 1 year;
- A broker or other middleman holding an OID obligation, including CDs, as nominee for the actual owner;
- A trustee or middleman of a WHFIT or widely held mortgage trust (WHMT); or
- A real estate mortgage investment conduit (REMIC), a holder of an ownership interest in a financial asset securitization investment trust (FASIT), or an issuer of a collateralized debt obligation (CDO).
Also, file Form 1099-OID for any person for whom you withheld and paid any foreign tax on OID or from whom you withheld (and did not refund) any federal income tax under the backup withholding rules even if the amount of the OID is less than $10.
Original issue discount. OID is the excess of an obligation's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). A discount of less than 1/4 of 1% of the stated redemption price at maturity, multiplied by the number of full years from the date of issue to maturity, is considered to be zero.
Reporting OID. You must prepare a Form 1099-OID for each person who is a holder of record of the obligation if the OID includible in the holder's gross income is at least $10. See the instructions for box 1 on this page.
Ordinarily, you will file only one Form 1099-OID for the depositor or holder of a particular obligation for the calendar year. If a person holds more than one discount obligation, issue a separate Form 1099-OID for each obligation. However, if a person holds more than one certificate of the same issue for the same period of time during the calendar year, and if Form 1099-OID amounts are proportional, you may treat all such certificates as one discount obligation and file a single Form 1099-OID.
For information about how to compute OID, see sections 1271 - 1275 and their regulations.
If you are a broker or middleman who holds a bank CD as nominee, whether or not you sold the CD to the owner, you must determine the amount of OID includible in the income of the owner, if any, and report it on Form 1099-OID.
Pub. 1212, Guide to Original Issue Discount (OID) Instruments, contains information on certain outstanding publicly offered discount obligations. It is available on IRS.gov.
Issuers of certain publicly offered debt instruments having OID must file Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments, within 30 days after the date of issuance. The information provided on that form will enable the IRS to update Pub. 1212. See Form 8281 for details.
Exceptions. You are not required to file Form 1099-OID for payments made to certain payees including a corporation, a tax-exempt organization, any IRA, an Archer MSA, Medicare Advantage MSA, HSA, a U.S. agency, a state, the District of Columbia, a U.S. possession, or a registered securities or commodities dealer.
CAUTION! eport interest on U.S. Savings Bonds on Form 1099-INT. Also report OID on obligations with a term of 1 year or less on Form 1099-INT.
Reporting interest and OID. If you are reporting stated interest and OID on an obligation, you may report both the taxable interest and the OID on Form 1099-OID. It is not necessary to file both
Forms 1099-INT and 1099-OID. On Form 1099-OID, report the interest in box 2 and the OID in box 1 or 8. You may choose to report the interest on Form 1099-INT and the OID on Form 1099-OID. However, you cannot report tax-exempt interest on Form 1099-OID. See Box 8. Tax-Exempt Interest on page 3.
Statements to recipients. If you are required to file Form 1099-OID, you must furnish a statement to the recipient. For more information about the requirement to furnish an official form or acceptable substitute statement to recipients, see part M in the 2013 General Instructions for Certain Information Returns.
Account number. The account number is required if you have multiple accounts for a recipient for whom you are filing more than one Form 1099-OID. Additionally, the IRS encourages you to designate an account number for all Forms 1099-OID that you file. See part L in the 2013 General Instructions for Certain Information Returns.
2nd TIN not. You may enter an "X" in this box if you were notified by the IRS twice within 3 calendar years that the payee provided an incorrect taxpayer identification number (TIN). If you mark this box, the IRS will not send you any further notices about this account. However, if you received both IRS notices in the same year, or if you received them in different years but they both related to information returns filed for the same year, do not check the box at this time. For purposes of the two-notices-in-3-years rule, you are considered to have received one notice. You are not required to send a second "B" notice upon receipt of the second notice. See part N in the 2013 General Instructions for Certain Information Returns for more information.
For information on the TIN Matching System offered by the IRS, see Items You Should Note in the 2013 General Instructions for Certain Information Returns.
Box 1. Original Issue Discount for 2013
Report the OID on the obligation for the part of the year it was owned by the record holder. Do not include the amount reported in box 8. For a discussion of WHFITs, WHMTs, REMICs, FASITs, and CDOs, see the instructions later.
Box 2. Other Periodic Interest
Enter any stated interest (that is not OID) paid or credited on this obligation during the year. However, you may report any stated interest that is not OID on Treasury Inflation-Indexed Securities in box 3 of Form 1099-INT rather than in box 2 of Form 1099-OID. Interest reported here must not be reported on Form 1099-INT. For a discussion of REMICs, FASITs, and CDOs, see the instructions later.
Box 3. Early Withdrawal Penalty
Enter interest or principal forfeited because of an early withdrawal, such as an early withdrawal from a CD, that is deductible from gross income by the recipient. Do not reduce the amounts in boxes 1 and 2 by the amount of the forfeiture. For detailed instructions for determining the amount of forfeiture deductible by the holder, see Rev. Ruls. 75-20, 1975-1 C.B. 29, and 75-21, 1975-1 C.B. 367.
Box 4. Federal Income Tax Withheld
Enter backup withholding. For example, if a recipient does not furnish its TIN to you in the manner required, you must backup withhold at a 28% rate. The 28% rate applies to amounts required to be reported in boxes 1, 2, and 8 but limited to the cash paid on these obligations. Before applying the 28% rate, you may reduce the amounts reported in boxes 1 and 2 by the amount reported in box 3.
For information on requesting the recipient's TIN, see part J in the 2013 General Instructions for Certain Information Returns.
Box 5. Foreign Tax Paid
Enter any foreign tax paid on OID. Report this amount in U.S. dollars.
Box 6. Foreign Country or U.S. Possession
Enter the name of the foreign country or U.S. possession for which the foreign tax was paid and reported in box 5.
Box 7. Description
Enter the CUSIP number, if any. If there is no CUSIP number, enter the abbreviation for the stock exchange, the abbreviation for the issuer used by the stock exchange, the coupon rate, and the year of maturity (for example, NYSE XYZ 12½ 25). If the issuer of the obligation is other than the payer, show the name of the issuer.
Box 8. Original Issue Discount on U.S. Treasury Obligations
Enter the OID on a U.S. Treasury obligation for the part of the year it was owned by the record holder. Do not include this amount in box 1. You may enter any stated interest on the Treasury obligation in box 2.
If you make payment on a U.S. Treasury obligation on which OID is reportable, enter your name, address, and federal identification number on Forms 1099-OID and 1096, not those of the U.S. Treasury Department or the Bureau of Public Debt.
Box 9. Investment Expenses
For single-class REMICs only, see Box 9. Investment Expenses under Rules for REMICs, FASITs, and Issuers of CDOs later.
Box 10. State
Enter the two letter postal abbreviation of the state for which state income taxes are being withheld.
Box 11. State Identification No.
Enter the payer's state identification number.
Box 12. State Tax Withheld
Enter the state income tax withheld on the payments reported on this form.
Rules for Widely Held Fixed Investment Trusts (WHFITs) and Widely Held Mortgage Trusts (WHMTs)
If the OID attributable to a trust interest holder (TIH) exceeds $10 for the calendar year, trustees and middlemen must use Form 1099-OID to report both the gross amount of OID (box 1) and interest (box 2) of the WHFIT that is attributable to the TIH. If the trustee provides WHFIT information using the safe harbor rules in Regulations section 1.671-5(f)(1) or (g)(1), the trustee or middleman must determine the amounts reported on Form 1099-OID under Regulations section 1.671-5(f)(2) or (g)(2), as appropriate.
Reporting OID for a widely held mortgage trust (WHMT). If a WHMT has a start-up date before August 13, 1998, trustees and middlemen of the WHMT are not required to report OID information. If the WHMT has a start-up date on or after August 13, 1998, and on or before January 24, 2006, and the trustee has attempted in good faith, but without success, to obtain the historical information required to provide OID information, no penalties will be imposed if the trustee and middlemen of the WHMT do not provide OID information. The trustee must provide a statement to middlemen indicating that the trustee is not providing OID information because the trustee has attempted, in good faith, to obtain the information necessary to calculate OID but has been unsuccessful. See Regulations section 1.671-5(m)(2).
Requirement to furnish a tax information statement to the TIH. A tax information statement that includes the information provided to the IRS on Form 1099-OID, as well as additional information identified in Regulations section 1.671-5(e) must be provided to TIHs. The written tax information statement must be furnished to the TIH by March 15. The amount of an item of a trust expense that is attributable to a TIH must be included on the tax information statement provided to the TIH and is not required to be included in box 9 on the Form 1099-OID.
For more filing requirements, see the 2013 General Instructions for Certain Information Returns.
Rules for REMICs, FASITs, and Issuers of CDOs
CAUTION! These reporting rules apply only to FASITs in existence on October 22, 2004, to the extent that regular interests issued by the FASIT before that date continue to remain outstanding in accordance with the original terms of issue.
REMICs, holders of ownership interests in FASITs, issuers of CDOs, and any broker or middleman who holds as a nominee a REMIC or FASIT regular interest or CDO must file Form 1099-OID. The form is used to report OID of $10 or more accrued to a REMIC or FASIT regular interest holder or to a holder of a CDO. Also use Form 1099-OID to report other interest accrued to a REMIC or FASIT regular interest holder during the year or paid to a holder of a CDO. You may use Form 1099-INT rather than Form 1099-OID to report interest for an instrument issued with OID if no OID is includible in the regular interest holder's or CDO holder's income for the year.
You are not required to file or issue Form 1099-OID for exempt recipients including but not limited to the following.
- A corporation.
- A broker.
- A middleman/nominee.
- A financial institution.
- Any IRA, Archer MSA, Medicare Advantage MSA, or HSA.
- A tax-exempt organization.
For additional exempt recipients, see Regulations section 1.6049-7(c).
Box 1. Original Issue Discount for 2013
Report in box 1 the aggregate amount of OID includible in the gross income of each REMIC or FASIT regular interest or CDO holder for the period during the year for which the return is made. No amount should be reported in box 8.
Box 2. Other Periodic Interest
Report in box 2 any amount of interest, other than OID, accrued to each REMIC or FASIT regular interest holder or paid to each CDO holder. If you are a single-class REMIC (as defined in Temporary Regulations section 1.67-3T(a)(2)(ii)(B)), increase the amount otherwise reportable in box 2 by the regular interest holder's share of investment expenses of the REMIC for the year.
Box 9. Investment Expenses
Enter the regular interest holder's pro rata share of investment expenses deductible by a single-class REMIC.
Statements to Holders
For each Form 1099-OID you are required to file, you must furnish a statement to the REMIC or FASIT regular interest or CDO holder identified on the form. The statement must contain the information shown on Form 1099-OID, including the legend shown on Copy B of the official Form 1099-OID, and an indication that these items are being furnished to the IRS. The statement also must show the information specified in Regulations section 1.6049-7(f)(2)(ii). In addition, the statement furnished by a REMIC must show, for each calendar quarter, the information specified in Regulations section 1.6049-7(f)(3). Also see Regulations section 1.6049-7(f)(3)(ii) for information that may be required to be reported to a real estate investment trust (REIT) that holds a REMIC regular interest.
A single-class REMIC (as defined in Temporary Regulations section 1.67-3T(a)(2)(ii)(B)) must include in the statement the investment expenses paid or accrued during each calendar quarter by the REMIC for which the REMIC is allowed a deduction under section 212 and the proportionate share of those investment expenses allocated to the regular interest holder.
The statement must be furnished to holders by March 15. To meet the statement requirement, you may furnish a copy of Form 1099-OID and a separate statement containing the additional information to the REMIC or FASIT regular interest or CDO holder.
For information about reporting income to REMIC residual interest holders, see the instructions for Schedule Q (Form 1066), Quarterly Notice to Residual Interest Holder of REMIC Taxable Income or Net Loss Allocation, in the separate Instructions for Form 1066.
Form 8811 and Reporting by Brokers or Middlemen
REMICs and issuers of CDOs also must file Form 8811, Information Return for Real Estate Mortgage Investment Conduits (REMICs) and Issuers of Collateralized Debt Obligations, within 30 days after the startup date of the REMIC or issue date of a CDO. The IRS will use the information on Forms 8811 to update Pub. 938, Real Estate Mortgage Investment Conduits (REMICs) Reporting Information, for use by certain brokers, middlemen, corporations, and others specified in Regulations section 1.6049-7(e)(4). Pub. 938 is available at IRS.gov.
For the requirements that a REMIC or CDO issuer or a broker or middleman who holds a REMIC or FASIT regular interest or a CDO furnish certain information on request, see Regulations sections 1.6049-7(e) and 1.6049-7(f)(7).