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Instructions for Recipient
Original issue discount (OID) is the excess of an obligation’s stated redemption Box 1. Shows the OID on a taxable obligation for the part of the year you owned
price at maturity over its issue price (acquisition price for a stripped bond or it. Report the amount in box 1 as interest income on your income tax return.
coupon). OID on a taxable obligation is taxable as interest over the life of the However, depending on the type of debt instrument, the issue or acquisition
obligation. If you are the holder of a taxable OID obligation, you must generally date, and other factors (for example, if you paid acquisition or bond premium, or
include an amount of OID in your gross income each year you hold the the obligation is a stripped bond or coupon), you may have to figure the correct
obligation. Obligations that may have OID include a bond, debenture, note, amount of OID to report on your return. See Pub. 1212 for details on how to
certificate, or other evidence of indebtedness having a term of more than 1 year. figure the correct OID. See the instructions above for a covered security
For example, the OID rules may apply to certificates of deposit (CDs), time acquired with acquisition premium.
deposits, bonus savings plans, and other deposit arrangements, especially if the Box 2. Shows qualified stated interest on this obligation for the year, which is an
payment of interest is deferred until maturity. In addition, the OID rules apply to amount separate from the OID. If you held the obligation the entire year, report
Treasury inflation-protected securities. See Pub. 550 for more information. this amount as interest income on your tax return. If you disposed of the
If, as the record holder, you receive Form 1099-OID showing amounts obligation or acquired it from another holder during the year, see Pub. 550 for
belonging to another person, you are considered a nominee recipient. Complete reporting instructions. If there is an amount in both boxes 2 and 8, the amount in
a Form 1099-OID for each of the other owners showing the amounts allocable to box 2 is interest on a U.S. Treasury obligation and is exempt from state and
each. File Copy A of the form with the IRS. Furnish Copy B to each owner. List local income taxes. If there is an amount in both boxes 2 and 11, the amount in
yourself as the “payer” and the other owner as the “recipient.” File Form(s) box 2 is tax-exempt interest and is not included in interest income on your tax
1099-OID with Form 1096 with the Internal Revenue Service Center for your return. In general, see how to report tax-exempt interest in the Instructions for
area. On Form 1096, list yourself as the “filer.” A spouse is not required to file a Form 1040.
nominee return to show amounts owned by the other spouse. If you bought or Box 3. Shows interest or principal forfeited if you withdrew the money before
sold an obligation during the year and you are not a nominee, you are not the maturity date of the obligation, such as from a CD. You may deduct this
required to issue or file Form 1099-OID showing the OID or stated interest amount to figure your adjusted gross income on your income tax return. See the
allocable to the seller/buyer of the obligation. Instructions for Form 1040 to see where to take the deduction.
The information provided may be different for covered and noncovered Box 4. Shows backup withholding. Generally, a payer must backup withhold if
securities. For a description of covered securities, see the Instructions for Form you did not furnish your TIN or you did not furnish the correct TIN to the payer.
8949. For a covered security acquired with acquisition premium, your payer See Form W-9 for information on backup withholding. Include this amount on
must generally report either (1) a net amount of OID that reflects the offset of your income tax return as tax withheld.
OID by the amount of acquisition premium amortization for the year, or (2) a Box 5. For a covered security acquired with OID, if you made an election under
gross amount for both the OID and the acquisition premium amortization for the section 1278(b) to include market discount in income as it accrues and you
year. For a noncovered security acquired with acquisition premium, your payer notified your payer of the election in writing in accordance with Regulations
is only required to report the gross amount of OID. section 1.6045-1(n)(5), shows the market discount that accrued on the debt
Recipient’s taxpayer identification number (TIN). For your protection, this instrument during the year while held by you. For a tax-exempt obligation that is
form may show only the last four digits of your TIN (social security number a covered security acquired on or after January 1, 2017, and issued with OID,
(SSN), individual taxpayer identification number (ITIN), adoption taxpayer shows the market discount that accrued on the obligation during the year while
identification number (ATIN), or employer identification number (EIN)). However, held by you. For a covered security acquired on or after January 1, 2015, market
the issuer has reported your complete TIN to the IRS. discount will be calculated on a constant yield basis unless you notified your
FATCA filing requirement. If the FATCA filing requirement box is checked, the payer in writing in accordance with Regulations section 1.6045-1(n)(5) that you
payer is reporting on this Form 1099 to satisfy its chapter 4 account reporting did not want to make a constant yield election for market discount under section
requirement. You may also have a filing requirement. See the Instructions for 1276(b). The payer may, but is not required to, report the market discount for a
Form 8938. tax-exempt obligation that is a covered security acquired before January 1,
Account number. May show an account or other unique number the payer 2017. Report the accrued market discount on your income tax return as directed
assigned to distinguish your account. in the Instructions for Form 1040. Market discount on a tax-exempt security is
includible in taxable income as interest income.
(Continued on the back of Copy 2)
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