Everything you need to know about filing 1099s, W-2s, and other tax forms for your business
Form 1099-OID is the IRS information return issuers and brokers use to report Original Issue Discount — the interest income that builds up when a bond or other debt instrument is issued below its face value. If you issued or hold such a debt instrument and the OID for the year is $10 or more, you must file Form 1099-OID with the IRS and send a copy to each holder.
Our platform makes 1099-OID eFiling fast, accurate, and IRS-compliant — even when you are reporting hundreds of debt instruments across a busy filing season.
Form 1099-OID — formally titled Original Issue Discount — reports interest income that accrues on debt instruments sold for less than their face value. OID is the difference between the stated redemption price at maturity and the price the instrument was first issued at. Even though the holder does not receive that interest in cash each year, the IRS treats a portion of it as taxable income annually.
Holders use the information on Form 1099-OID to report interest income on their federal tax return, usually on Schedule B. The form tells them how much OID accrued during the year, plus any other interest paid on the instrument. Accurate reporting keeps your holders from underreporting income — and keeps your filings off the IRS correction list.
You must file Form 1099-OID if the total OID on a debt instrument is $10 or more for the year. Filers required to report include:
File a separate Form 1099-OID for each holder and each debt instrument. If you paid other interest on the same instrument — such as stated interest on a bond — report that in the appropriate box on the same form rather than filing a separate 1099-INT.
Note: Some obligations do not require 1099-OID reporting, including certain short-term instruments with a fixed maturity of one year or less. Check the current IRS instructions to confirm whether an instrument is reportable before you file.
Collect the following before you file:
Validate every holder’s TIN before you file. A mismatched name and TIN is the most common cause of a rejected return, and it is the easiest error to catch early. Run each recipient through TIN Matching first, then file with confidence.
Deadlines for Form 1099-OID are fixed. File on time to avoid penalties.
| Milestone | Deadline |
|---|---|
| Recipient copies furnished | January 31 of the year following the tax year |
| IRS paper filing | February 28 |
| IRS eFile submission | March 31 |
Filing threshold: If you file 10 or more information returns of any type in a calendar year, the IRS requires you to file electronically. eFiling meets that requirement and confirms receipt the moment you submit.
Penalties: Late or incorrect filings may result in penalties of $60–$310 per form, based on how late the correction is made. Intentional disregard penalties start at $660 per form with no cap. Filing accurate returns on time is the simplest way to avoid every one of these charges.
What is Form 1099-OID used for?
Form 1099-OID reports Original Issue Discount — the interest that accrues on a bond or other debt instrument issued below its face value. Holders use it to report that interest income on their federal tax return, even though they did not receive it in cash during the year.
Who is required to file Form 1099-OID?
Issuers, brokers, and financial institutions must file when the OID on a debt instrument totals $10 or more for the year. You also file whenever you withheld federal income tax under backup withholding, regardless of the OID amount.
When is Form 1099-OID due?
Recipient copies are due by January 31. Paper filings with the IRS are due February 28, and eFile submissions are due March 31.
What’s the difference between Form 1099-OID and Form 1099-INT?
Form 1099-OID reports interest that accrues from a discount at issue. Form 1099-INT reports interest paid in cash, such as stated interest on a savings account or bond. If a single instrument has both OID and other periodic interest, report both on the 1099-OID rather than splitting them across two forms.
Do I file a separate 1099-OID for each debt instrument?
Yes. File a separate Form 1099-OID for each holder and each debt instrument that meets the reporting threshold.
Is OID taxable even though the holder didn’t receive cash?
Yes. The IRS treats a portion of the discount as taxable interest each year the holder owns the instrument. That is why you report it annually on Form 1099-OID rather than only at maturity.
How do I avoid a rejected 1099-OID filing?
Validate each holder’s name and TIN before you submit. Mismatched taxpayer data is the leading cause of rejected returns. Running TIN Matching first catches these errors while you can still fix them.
What IRS penalties apply for missing or incorrect 1099-OID forms?
Penalties range from $60 to $310 per form depending on how late the correction is filed. Intentional disregard penalties start at $660 per form with no cap.
Report Original Issue Discount accurately and on time. Start your free 7-day trial and file 1099-OID forms directly with the IRS today.
