Form 1099-OID
Original Issue Discount
Original Issue Discount
A 1099-OID, “Original Issue Discount,” is a tax form used in the United States to report the taxable difference between the face amount of a bond, note, or other form of debt instrument and its original issue price. The OID is essentially the amount of interest that is built into the instrument’s price and will be realized over the life of the debt. A 1099-OID needs to be filed by the issuer of the debt instrument or any middleman who holds the instrument as a nominee and is in receipt of OID on behalf of the actual owner. This form is part of the 1099 series, which are used to report various types of income that individuals may receive throughout the year other than salary from an employer. It is an essential document for tax reporting purposes, ensuring that interest income is correctly reported to the IRS.
Per the IRS, file Form 1099-OID:
- If the original issue discount (OID) includible in gross income is at least $10.
- For any person for whom you withheld and for whom you paid any foreign tax on OID.
- From whom you withheld (and did not refund) any federal income tax under the backup withholding rules ev,en if the amount of the OID is less than $10.