1099-INT box guide
1099-INT Box 2: Early withdrawal penalty
Trace an early withdrawal penalty from Form 1099-INT to the eligible Schedule 1 adjustment.
Return destination
Where the amount goes
Schedule 1 early withdrawal penalty adjustment
1099-INT
Return to the complete form guide and reconciliation worksheet.
Checks before filing
- Match the penalty to the account withdrawal records.
- Do not subtract Box 2 directly from Box 1 on Schedule B.
- Confirm the current Form 1040 instructions allow the adjustment for your facts.
Related 1099-INT boxes
Box 1: Interest income
Understand taxable bank and investment interest and where it enters the federal return.
Box 3: U.S. savings bond and Treasury interest
Separate federally taxable Treasury interest that may receive different state income-tax treatment.
Box 4: Federal income tax withheld
Reconcile backup withholding from interest with the federal withholding claimed on Form 1040.
Box 8: Tax-exempt interest
Report federally tax-exempt interest without including it in ordinary federal taxable interest.
Frequently asked questions
What does Box 2 mean on 1099-INT?
Box 2 reports a penalty charged because funds were withdrawn before maturity. It is not negative interest; when eligible, it is claimed separately as an adjustment to income.