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Treasury Bills: Tax Considerations

What Is Taxable Income?

The difference between what you pay for a Treasury bill and the amount we pay you at maturity is interest. This interest is exempt from state and local income taxes.

Keeping Track of Your Taxable Income

TreasuryDirect

For a bill held in TreasuryDirect, you can view your Form 1099-INT online and print it. The form is posted at the beginning of the year, in the year after the bill matures. Also, a record of all taxable transactions is available at any time. To see it, click the “Manage Direct” tab, then under “Manage My Taxes” choose the appropriate year.

Legacy Treasury Direct

If you hold a bill in Legacy Treasury Direct, we mail you your Form 1099-INT. The form is mailed to you at the beginning of the year, in the year after the bill matures.

If you need duplicate 1099-INT forms for the current tax year, you can order them from us. Order online in Electronic Services for Treasury Bills, Notes, and Bonds or call 800-722-2678, choose Option #1, and follow the prompts. NOTE: Forms for the current tax year are available February through November.

To request 1099-INT forms for years prior to the current tax year, call 800-722-2678 and choose Option #5 to speak with a customer service representative. Representatives are available from 8 a.m. to 8 p.m. Eastern Time, Monday through Friday, excluding holidays.

Bank, Broker, or Dealer

Consult your bank, broker, or dealer.

A 1099 Point To Remember

If a bill matures at the end of a year and we don't issue payment until the first days of the following year, the interest for that bill will be shown on the 1099-INT for the year in which the bill matured, not for the year in which the interest was paid.

Tax Withholding

If you hold a bill with us, we can ease your tax burden by withholding up to 50 percent of your interest earnings.

• TreasuryDirect allows you to specify online the percentage you want us to withhold.
• With Legacy Treasury Direct, you write to your customer contact center, give your account number, and state the percentage of your earnings that you want us to withhold.

With either system, we transfer your withholdings to the Internal Revenue Service and report the withheld amount on your Form 1099-INT.

Tax Deduction

Legacy Treasury Direct customers: You may be able to deduct the annual maintenance fee we impose on Legacy Treasury Direct accounts of more than $100,000. See IRS Publication 550.