2008 Instructions for Forms Department of the Treasury Internal Revenue Service 1099-INT and 1099-OID ‘Section eterences are to the Internal Revenue Code unless ‘otherwise noted. Reminder General instructions._ in addition to these specific Instructions, you should also use the 2008 General instructions ‘or Forms 1099, 1096, 5498, and W-2G. Those general instructions include information about the folowing topics. ‘Backup withholding, Electronic reporting requirements. Penaties. who must fle (nominee/midaieman). When and where to fle. “Taxpayer identication numbers. ‘Statements to recipients. ‘Corrected and void returns. + Other general topics. ‘You can get the general instructions from the IRS website at waves gov or by caling 1-B00-TAX-FORM (1-800-829-3676). Specific Instructions for Form 1099-INT Fie Form 1099NT, intrest Income, for each person: 4. Towhom you pad amounts reportable in boxes 1.9, and 8 of atleast $10 (or at least $600 of interest pain the course. (of your trade or business desorbed inthe instructions for Box f. Interest income on page 2). 2. For whom you withheld and paid any foreign tax on interest, oF 3. From whom you withheld (and did not refund) any federal Income ax under the backup withhoking rules ragardeas ofthe amount of the payment. Report only interest payments made in the course of your trade or business including federal, state, and local government agencies and activites deemed nonprofit, or for which you were Sent ee enter nery ee eee ‘exempiinterest dividends from a iavesimant ‘company (RIC), only on Form 1098-NT. You do not need to ‘oper tax-exempt interest that is original issue discourt (OID). Repo interest thats taxable OID in box 1 or 6 of Form. 3089-010, Original Issue Discount, not on Forrn 1069-INT. Canadian nonresident aliens. if you pay U.S. bank doposit Interest of at least $10 to a nonresident alien who resides in ‘Ganada, you may have to report the interest on Form 1042S, Foreign Person's U.S. Source Income Subject to Withholding, ‘This interest isnot subject to backup withholding. See the. Instructions for Form 1042-8. Exceptions to reporting. No Form 1009:INT is roquirod to be fled for paymenis made to exempt recipients or for interest ‘excluded from reporting. Exempt recipients. You ate ot egure 1s Form, 1096:INT for paymants made to carain payees Inducing Dut ‘ot hited of corporstion, a ax-axempt organization, any IRA, Bicher MSA, or health savings account (HSA), a U.S agency. & Stale, te Dirt of Columbia. a US. possession, a registered Sccuttes or commode desie, nominees or custodians, brokers, or notional principal criract (swap) dealers. For addtional exempt racpients, see Regulations section 1.60444 for more information. Interest excluded from ‘You are not required to file Form 1099-INT for interest on an obligation issued by an ‘naivdual, interest on amounis from sources outside the United ‘States paid outside the United States by a non-U.S. payer or on-U.S. middleman, certain portotio interes, interest on an ‘obligation Issued by an intemational organization and pais by that organization, and ps ‘made toa foreign beneficial ‘owner or foreign payee. See Foguiations section 1.60405 for more information Other: 9. Do not report tax-deferred interest, such a interest tha is earned but cot cistrbuted from an IRA, When is a payment made? Generally, interest is paid when it is credied or set apart for a person without ary substantial limitation or restriction as to the ime, manner, or condition of ‘payment. The interest must be made avaliable so that it may be ‘drawn on at any time and its receipt brought within the contro! ‘and disposition of the person, For payments made on obleations suet to vansactonal repoting (or exampie, savings bonds, rerest coupons, and ‘ther demand oelgation).ferests paid ate te the ‘Solan is prserted or payiner. For exarrle, ore ona oupon detached from a bond is paid when I presented for payment Reporting interest and OID. if you are poring intrest and ‘gna sue eiseount (01D) on ay obligation, you may report hho taxable interest and the O1 on Form 1088-010. is nok necessary to fle both Forms 19ST and 108616. On Form 1099-010, roport the treat inbox 2 and tho OID In ox 41916. However, you may choose lo report nterst on Fora {GBS:NTand the O1D on orm 1090-090. Statements to recipients If you ae equed to fe Form 4099:NT, you must umigh statment he recipes Fox more information abo he requirement to furish an ofa form or acceptable austtute statement o recipients in person, by statement maiing, or electronical, see par Min a 2008 Sonera Insrucions ior Forme 1009 i688, 8198, and W081 you have furnished Forms 1089/INT toa teopon or amounts ‘evsived cing the year atthe time ofthe tensaclons, such as ‘you might have dare for window tangactions do ret haus ‘hege same amour ina Form 1OS6:NT lurishe othe seme recbient fr other payments during the yor. ‘Account number, The account number is required if you have muipleaasounts fra rsp! for whom you ae fling ore than one Form 1009:INT-Adstonly, te 19S encourages you to designate an account aumber for ai Forms 10881NT fet Youtle See par Ln the 2008 General insracions fo Fors Yee, 1088, 5488, and W.26. 2nd TI not. You may enter an“x" inthis box you wore nai’ bythe I twee witun 9 calondar year Yat the provided anincorron axpayerenticaon number (HA) Youmark ts box. the 1 wi not send you any furor notes oot is accouni, Howover, fl you recowed both IAS roves h tho same year, orf you rcshas hemi fesen years oa they both flated to oration rue fas forty same ear, {So Rot cheek the box ais tna. For purpoees of he wo notes in year rl, you are considered fo hava fovswved one Totes, You ave nat requires fo sond a second noice upse ‘ecait ofthe second not. Seo pat Nine 2008 Genora instictons for Forme 1099, 1008, 498, and W:26 for more infomation. Cal. No. 27080N,For information on the TIN Matching System offered by the IRS, see page 2 in the 2008 General Instructions for Forms 1099, 1098, 5498, and W-2G, aT te, pans nectei Scarce parame Seer ce SS ry Box 1. Interest Income Enter itorest not included inbox 3. Include amounts of $10 or more, whether or not designatod as ites. that are paid or ‘rated tothe persons account by savings ard loan Sceacitons muva savings banks not havi canal stock Topreserted by shares, ouding and loan sesacaton, Cepetatve barks, nomestaadaesocalion,oredt unions, © Emir organizations. Inco intrest on ban coposts, accumulated dvigends pal by aif insurance Company, indeblecness (cluding bonds, cobentures, notes, anc Cortes over than those ofthe US, Treasury) issued in fogstored fom oro a ype offre to tho pubbc, or amourts from wien you vihhel federal income ta or orelgn fax. In Aalon, report terest of $10 or more accrued toa rut IMtarest bolder (iH) ofa widoy hold xed imestnent tt (WHE), eal estate morgage Investment condut (FEWIC), a fnandal tee secuization ivesiment rust PASIT) roger Imret holder, o paid a colatraized debt obigaton (C00) raider 9 explained below. ‘Aso include interest ot $600 or mero palin the course of your ado business ot meetin te above ees, ch a2 Intret on celayod coctn bones paid bya ifs houranco compan, infers rosowes with damages, inteost ona tat or federal income tx en, or rest atrbulble toa evap wih Snican nonporotie payments Inde inbox 1 ary accrued terest on bonds soa between intrest dates fron a payment cate). Also show OID on Shortterm osigations ef year or less and imoreton ll Boar carta cl cepost. Do ret nti bor 1 iret on taxee covenant bors ‘or cvdends from money marke unde (wich ara rporiabie on Ferm 1090-DIV) Do net noise any description inbox Interest from clean renewable energy bonds and Gulf tax Credit bonds. Report amounts cf $tB.r mote on Gean renewable energy fonds and Guf tax cred bones, Treat nese {ounis as paid onthe creck allowance date. The ced ‘Slowance dates are Maren 19, une 19, September 15, December 15, and te st day on wich the bond is touslanaing For bond issued during the month period nding on & cre elowance dle an for bonds whi ate redered 0: mature, te amount ofthe cre determined rally based onthe orton of fhe -morth pn’ ring which the bonds outstanding. Goneraly, inerest paid isnot required tobe reported io the list of recbierts below. However hey ave holders of lean renewable energy bonds or Gul tx ced bore, to tert ‘must be reported SRcoreraton, A Godan secures or commodities required to register as Such under tho laws ofthe United States, sate, tho Distt ot Columbia, o”a possession ofthe Unted Stats, S‘hreal estate nvesimert ust as danagin secon 856, An ety veisteed etal tes dating he tx year under the Irwestment Compary Act ct 1380 "common nus fund as done n secon 584(), of + ay tust arch s exempt om tax under sector 84(0). Box 2. Early Withdrawal Penalty Enter interest o princioal foreted because of an easly vwiticrawal of time deposit, such as an earty withdrawal from a Cerificate of deposit (CD), thal is deductible trom gress income by the recipient, Do not reduce the amount reported in box 1 by the amount ofthe foreture. For detaled instructions for determining the ammount of foreiture deductible bythe depositor, 6ee Rev. Ruts, 75-20, 1975-1 C.B. 28, and 75-21, 1975-1 C8. 267, Box 3. Interest on U.S. Savings Bonds and Treas. Obligations Ener tre on U.S. Savings Bonds, Treasury bis, Treasury notes, and Treasury bonds. Bo not include in Box 1. Ht you make payment on a U.S. Savings Bond or other US. ‘obligation on which interes is teportabe, enter your name, ‘address, and federal identfication numoer on Form 1099-iNT land Form 1086, Annual Surnmary and Transmit of US. Information Returns, not those ofthe U.S. Treasury Department ‘oF the Bureau of Pubic Debt Box 4. Federal Income Tax Withheld Enter backup withholding. For example, ia recipient does not {umish its TIN to you in the manner required, you must backup withhold at a 28% rate on payments required to be reportod in ox 1 which may be reduces by the amount reported in box 2), ‘box:3, and box 8 on this form. For information on requesting the recipient's TIN, see part J in the 2008 General instructions for Fors 1099, 1098, 6498, and W.26. Box 5, Investment Expenses For sngle-lass REMICs ony, see Box 5 Investrent Expenses under Fules for REMICs, FASITS, and Issuers of CDOs below. Box 6, Foreign Tax Paid Enter any foreign tx withhelé and pais on interes. Report this amount in US, dollars. Box 7. Foreign Country or U.S. Possession Enter the name ofthe foreign country or U.S. possession to ‘which the withheld tax applies. Box 8. Tax-Exempt Interest Enter interest of $10 of more that is credited or paid to the ‘person's account if that inierest is used to finanee government Dperations and is issuad by a state, the District of Columbia, 2 USS. possession, an incian troal government, of a poltical subdivision. A politcal subdivision includes port authorities, tll, oad commissions, utity services authorities, community redevelopment agencies, and quaitied volunicer fre ‘departments. Include in box 8 any accrued intrest on these bonds sold between interest datos (or on a payment date). Also include any exempt-interest dividonds from @ reguialeg investment company (RIC). Do nat include any exemptinterest dividends on Form 1099-O1V, Dividends and Distributions. 'No information reporting for tax-exempt OID under section| 66049 wil be required untl such time as the IRS and Treasury Provide future guidance, Include specified private activity bond interest in box 9 and in the fota for box 8. See the instruction for Box 9 below. Box 9. Specified Private Activity Bond Interest Enter interest of $10 or more of interest from specified private activity bonds. Generally, "specified private acy bond ‘means any private activity bond defined in section 141 and issued after August 7, 1986, See section 57(a)6) for mere \dlalls. Also 828 the instructions for Focm 6251, Alternative Minimum Tax—Indviduals. Include exempt interest dividends paid by a RIC on specitied private activity bonds tothe extent thatthe dividends are le to interest on the bonds recelved by ine FIC minus an allocable share of the expenses. Rules for Widely Held Fixed Investment Trusts (WHFITs) ‘Trustees and middlemen must report the gross amount of interest atiibutable tothe TIH for tne calendar year on Form 4099-INT ifthat amount exceeds $10. 1 the trustee provcos: |WHFTT information using the sate harbor niles in Regaiations section 1.671-5(0(1) oF (@)(), the tustee or micoleman must ‘determine the amounts reporied on Form 1099.INT under Regulations section 1.671-5("(2) of (@)(2), a8 appropriate.Requirement to furnish a tax information statement to the IK. Aax information statement that includes the information provided fo the IRS on Form 1099-INT, as well as adtional Information Idenifed in Regulations section 1.671-5(e) must be to TIHs, The writen tax information statement must be Rimished tothe TIH by March 18. The amount ofan item of a ‘rust expense thats aibutable fo a TIH must be included on ‘he tax information statement provided to the TIH and is not requited fo be Included in box S on the Fort 1099-INT. For more fing requirements, soe the 2008 General Inetructions for Forms 1099, 1088, 5498, and W-26. Rules for REMICs, FASITs, and Issuers of CDOs These reporting rules apply only to FASITS in oxistonco ‘on October 22, 2004, o the extent that regular interests Issued by the FASIT before that date continue fo remain ‘outstanding in accordance with the original terms of issue. RIEMICs, holders of ownership interests in FASITs, issuers of CDOs, and any broker or middleman who hoigs as a ominee a REMIC of FASIT rogular interest or CDO must fle Form 1099-INT. The form is used to repo interest of $10. ‘more, other than OID, accrued to a REMIC or FASIT re Interest holder durin the year or pald toa hoicer of a CDO. it you are also reporting OID; this interest and the OID can be Feported on Form 1089-010. You do not have to file both Forms 1098-INT and 1099-0D. ‘You are not raquited to fle or issue Form 1099:INT for ‘exempt recipionts including but not limited tothe folowing, © Acorporation. ‘A broker. ‘A middlemaninomines. ‘financial institution, ‘Any IRA or Archer MBA. ‘© A tax-exempt organization. For additonal exempt recipients, soe Regulations section, 4.604970). Box 1. Interest Income FRopor in box 1 the amount of interest, other than OID, accrued to each REMIC or FASIT regular interest holder or paid to a 600 holder forthe period Tor which the return is mado. ifyou are a singlo-class REMIC (as defined in ‘Temporary Rogulatone section 1.67-37(a)(2)}(8),increaso the amount onerwise reportable in box 1 by the regular interest holder's share of investment expenses of the REMIC for the year, No amourt shauld be reported in box 3. Box 5. 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 10994NT you are required to fle, you must furigh a statement to the REMIC or FASIT regular interest holder or CDO holder idenifed on the form. The statement ‘ust contain the information shown on Forrn 1099-INT, including the legend shown on Copy B of the official For 4099-INT, and an indication that these items are being furnished to the IRS. The statement also must show the Information speciied in Regulations section 1.6049-7(1(2)(). In dation, the statement furnished by a REMIC must show, for ‘each calendar quarer, the information specified in Regulations ‘section 1.6049-7()(3). Also see Fagulatons section $.6049-74(3)) for formation that may be required to be reported to a eal estate Investment ust (REIT) that Noids a REMIC regular interest. A single-class REMIC (as defined in Temporary Regulations section 1.67-3T(a)(2\(iN(6)) must include in the statement the investment expenses paid or during each calendar {Quarter by the REMIC for which the REMIC 's allowed a. ‘deduction under section 212 and the proportionate share of those vestment expenses elocated tothe rear iterest ‘Tho statement must be furnished to holders by March 15. To eet the statement requirement, you may furnish a copy of Form 1088.1NT and a separate statement containing the ‘additional information to the REMIC or FASIT regular interest holder or CDO holder. For information about reporting income to REMIC residual Interest holdere, coe the inctrutione for Schedule Q (Fon 41066), 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 must also file Form 8811, Information Return for Real Estate Mortgage Investment ‘Conduits (REMICs) and Issuers of Collateralized Debt Obligations, within 30 days afier the start-up date ofthe REMIC ‘9F issue date of a GOO. The IRS wil use the information on Forms 8811 to updale Pub, 998, 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 avaiable only on the IRS website at wwnw.i's.govppubjrs-pav 9936 pal. For the requirements that a REMIC or CDO issuer or a broker or middleman who holds a REMIC or FASIT regular Interest or a COO furnish cortain information on request, see Regulations sections 1.6049-7(e) and 1.6049-7(0\(7). Specific Instructions for Form 1099-O1D File Form 1099-OID, Original issue Discount, if the original ‘issue discount (O1D) includible in gross income is at least S10. and you are any ofthe following: ‘* An issuer with any bond outstanding or other evidence of indebtedness in registered or bearer form issued with OID; ‘* Anissuer of a certificate of deposit (CD) made, purchased, or renewed after 1970 ifthe CD has OID and a term of more than +t year (see Caution on page 4); * A financial institution having other deposit arrangements, such as time deposits or bonus-savings pians, ithe arrangements have O1D and a term of more than 1 year, ‘* broker or other middleman hoiding an O1D obligatic Inoluding CDs, as nominee for the actual owner, ‘A trustee or middleman of a WHFIT of widely held mortgage trust (WHR); or, ‘* Areal 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, fle 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 ifthe amount of the OID is less than $10. Original issue discount. OID is the excess of an obligation’s stated redemption price at maturty over its issue price {acquisition price for a stripped bond or coupon}. A discount of less than ‘4 of 1% of the stated redemption price al 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 1089-OID for each pperson who is @ holder of record of the obiigation ifthe OID. includioie in the holder's gross income is at least $10. See tho {instructions for box 1 on page 4. Ordinarily, you will fle only one Form 1099-010 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 1098-OI0 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-O1D amounts are proportional, you may treat all such certificates as one discount obligation and file a single Form 1099-010.