TaxBandits Knowledge Base

Income Code

Type of Income

Explanation

Interest Income

01

Interest Income

General interest paid by U.S. payers, such as banks or corporations.

02

Interest Income

Interest earned on real estate mortgage loans.

03

Interest Income

Interest paid to a foreign corporation that controls a U.S. business.

04

Interest Income

Interest paid by a foreign corporation from U.S. investments.

05

Interest Income

Interest from tax-free covenant bonds issued before 1984.

22

Interest Income

Interest from deposits held with a foreign branch of a U.S. company.

29

Interest Income

Interest from bank deposits or savings accounts.

30

Interest Income

Original Issue Discount (OID) from certain debt instruments.

31

Interest Income

Short-term OID (less than 183 days).

33

Interest Income

Substitute payments in place of interest from securities lending or repurchase agreements.

51

Interest Income

Interest from publicly traded or actively traded securities.

54

Interest Income

Substitute payments on publicly traded interest securities.

Dividend Income

06

Dividend Income

General dividends paid by U.S. corporations.

07

Dividend Income

Dividends eligible for a reduced withholding tax rate.

08

Dividend Income

Dividends received from a foreign corporation.

34

Dividend Income

Substitute payments in place of dividends from securities lending or repurchase agreements.

40

Dividend Income

Dividend equivalents under IRC section 871(m) related to certain financial transactions.

52

Dividend Income

Dividends from publicly traded or actively traded securities.

53

Dividend Income

Substitute dividend payments for publicly traded securities.

56

Dividend Income

Dividend equivalents under IRC section 871(m) from combined financial transactions.

Other Income

09

Capital Gains

Gains from selling stocks, securities, or other investments.

10

Royalties

Industrial royalties from patents, trademarks, or franchises.

11

Royalties

Royalties from motion pictures, television, or broadcasting.

12

Royalties

Royalties from copyrights, software, or endorsement payments.

13

Royalties

Royalties paid on certain publicly offered securities.

14

Real Estate Income

Income from real property rentals, leases, or natural resources.

15

Pensions/Annuities

Pension, annuity, alimony, or insurance premium payments.

16

Scholarship/Fellowship

Taxable portion of scholarships, fellowships, or grants.

17

Independent Personal Services

Payments for self-employed work or contract services.

18

Dependent Personal Services

Compensation for employee wages and salaries.

19

Teaching Compensation

Earnings from teaching services in the U.S.

20

Study/Training Compensation

Compensation received during studying or training in the U.S.

23

Other Income

Miscellaneous income that does not fit other categories.

24

QIE Distributions

Capital gain distributions from a Qualified Investment Entity (QIE).

25

Trust Distributions

Trust distributions subject to withholding under IRC section 1445.

26

Trust Distributions

Distributions of unsevered growing crops or timber under IRC section 1445.

27

Partnership Distributions

Publicly traded partnership (PTP) distributions subject to withholding under IRC section 1446(a).

28

Gambling Winnings

Winnings from lotteries, casinos, or other gambling activities.

32

Notional Principal Contract Income

Income from notional principal contracts such as swaps and derivatives.

35

Substitute Payment - Other

Substitute payments in place of non-dividend or non-interest income.

36

Capital Gains Distributions

Distributions of capital gains from mutual funds or investment entities.

37

Return of Capital

Return of capital from an investment, not subject to tax.

38

Deferred Compensation

Deferred compensation under IRC section 877A(d)(1).

39

Nongrantor Trust Distributions

Distributions from a nongrantor trust under IRC section 877A(f)(1).

41

Guarantee of Indebtedness

Payments related to guaranteeing a loan or debt.

42

Artist/Athlete Income

Earnings from performances without a central withholding agreement.

43

Artist/Athlete Income

Earnings from performances with a central withholding agreement.

44

Federal Procurement Payments

Payments received under federal procurement contracts.

50

Escrow Procedure Income

Income previously reported under an escrow procedure.

55

Taxable Death Benefits

Payments from life insurance contracts that are taxable.

57

Amount Realized

Amount realized under IRC section 1446(f) on sales of partnership interests.

58

PTP Distributions - Undetermined

Publicly traded partnership distributions with an undetermined tax status.

59

Consent Fees

Fees paid for granting consent under financial contracts.

60

Loan Syndication Fees

Fees paid for arranging or participating in loan syndications.

61

Settlement Payments

Payments received as part of legal settlements.