TaxBandits Knowledge Base

What is Form 1099-OID?

Form 1099-OID is a tax form used by brokerage companies and similar financial institutions to report original issue discount (OID) income to the Internal Revenue Service (IRS)  if the OID is $10 or more and issue a copy of Form 1099-OID to the holder of the debt instrument. OID is the difference between the stated redemption price at maturity and the issue price of a debt instrument, such as a bond, that is issued for less than its face value.

The form reports the amount of OID income that the holder must include in their taxable income for the year in which the income was earned.

The form also includes information about the debt instrument, including the issuer's name and identification number, the holder's name and identification number, and the dates of acquisition and maturity.

Form 1099-OID is typically used for bonds, notes, and other debt instruments with a fixed maturity date. However, it may also be used for certain stripped bonds or coupons, as well as certain inflation-indexed bonds.

To learn more bout Form 1099-OID, click here.