1099-INT box guide
1099-INT Box 3: U.S. savings bond and Treasury interest
Separate federally taxable Treasury interest that may receive different state income-tax treatment.
Return destination
Where the amount goes
Federal taxable interest; separate state-treatment review
1099-INT
Return to the complete form guide and reconciliation worksheet.
Checks before filing
- Keep Box 3 separate from ordinary bank interest in your workpapers.
- Check the applicable state return instructions for Treasury treatment.
- Do not assume every government-related bond belongs in Box 3.
How Box 3 works
Box 3 reports interest on U.S. savings bonds, Treasury bills, Treasury notes, and Treasury bonds, and is kept off Box 1 on purpose because these instruments carry different state-tax treatment than ordinary bank or corporate interest. The instructions note this interest "may or may not be taxable" for a given year — Series EE and Series I savings bond interest can be reported on the cash method, deferring it until the bond is cashed, disposed of, or reaches final maturity, whichever comes first, or excluded entirely under the Education Savings Bond Program (Form 8815) when redemption proceeds pay qualified higher-education expenses. The Box 3 figure reflects what the payer determined was includible for that year, not necessarily every dollar the bond has ever earned.
For most holders, the Box 3 amount is federally taxable and feeds into the same total-taxable-interest figure on Form 1040 that Box 1 amounts feed into, but it's worth tracking separately in your own records, because interest on U.S. government obligations is generally exempt from state and local income tax while ordinary bank and corporate interest is not. When Treasury securities sit inside a brokerage account, check the year-end statement's detail pages for a Treasury-specific interest line — some composite statements show only a single combined interest total on the summary page, with the Box 3 breakout appearing several pages later.
Not every bond issued by a government-affiliated entity belongs in Box 3 — interest on bonds issued by state and local governments (municipal bonds) is a different category with the opposite federal treatment and is reported in Box 8, so the two are easy to confuse by name alone. A Treasury obligation that is a covered security acquired at a premium can also show an amount in Box 12; that figure interacts with Box 3 rather than sitting apart from it, and a payer that has already netted the premium into Box 3 is not expected to also report a separate Box 12 amount for the same security.
Worked example
A taxpayer holds a Treasury note paying $220 in interest for the year, reported in Box 3, and a savings account paying $60 in interest, reported in Box 1 on a different Form 1099-INT. On the federal return, both amounts combine into total taxable interest ($220 + $60 = $280). On the state return, the taxpayer's state exempts interest on U.S. government obligations, so only the $60 of bank-account interest is subject to state income tax — the $220 of Treasury interest is federally taxable but state-exempt.
Related 1099-INT boxes
Box 1: Interest income
Understand taxable bank and investment interest and where it enters the federal return.
Box 2: Early withdrawal penalty
Trace an early withdrawal penalty from Form 1099-INT to the eligible Schedule 1 adjustment.
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 3 mean on 1099-INT?
Box 3 reports interest on U.S. savings bonds and Treasury obligations. It is generally included in federal taxable interest but should remain separate for state-return analysis.
Is interest on my Treasury bonds exempt from federal tax?
No. Interest reported in Box 3 is generally taxable at the federal level like other interest income; the exemption that typically applies to U.S. government obligation interest is at the state and local level, not federal.
Do I combine Box 3 with Box 1 when I total up my interest income?
For federal purposes, yes — both are taxable interest and combine into the same total on Form 1040. Keep them separate in your own workpapers, though, since Box 3 amounts generally aren't subject to state and local tax while Box 1 amounts usually are.
Why does my municipal bond fund's interest show up in Box 8 instead of Box 3?
Box 3 is specifically for U.S. savings bonds and Treasury obligations. State and local government bond interest — the "municipal bond" category — is a different classification, federally tax-exempt, and reported in Box 8, not Box 3.