How to Enter TreasuryDirect 1099 in TurboTax

Receiving a Form 1099 from TreasuryDirect for your U.S. savings bonds or other Treasury securities means you have taxable interest income to report. The good news is that entering this information correctly into your tax software is a simple process. This guide will walk you through the exact steps for reporting TreasuryDirect interest from Form 1099-INT, 1099-OID, or 1099-B using TurboTax and explain the key details to ensure you get it right.

First, Understand Your TreasuryDirect 1099

Before you open your tax software, you'll need to get your tax form from the TreasuryDirect website. These are not mailed to you. To access your forms, log into your TreasuryDirect account, go to the ManageDirect tab, and look for the link for your year-end tax statements. You’ll be able to download a PDF of your Form 1099.

You may receive one of three common types of forms for income from government securities:

• Form 1099-INT: This is the most common form you'll receive from TreasuryDirect. It reports interest income earned from savings bonds like Series EE and I bonds, Treasury Notes (T-Notes), Treasury Bonds (T-Bonds), and Treasury Inflation-Protected Securities (TIPS).
• Form 1099-OID: If you held Treasury Bills (T-Bills) or other securities that were purchased for less than their face value and matured in the tax year, you will receive a 1099-OID. It reports the "Original Issue Discount," which is the difference between what you paid and the bond's redemption value at maturity, treated as interest.
• Form 1099-B: This form reports the proceeds from the sale or redemption of securities. You might receive this if you sold a marketable security like a T-Note before its maturity date.

Once you’ve identified and downloaded your form, you're ready to enter it into TurboTax.

Step-by-Step: Entering a 1099-INT in TurboTax

Form 1099-INT is by far the most frequent form issued by TreasuryDirect, typically for interest on popular Series I and EE savings bonds. Getting this one right unlocks an important state tax benefit.

1. Navigate to the Interest Income Section
In the main "Wages & Income" section of TurboTax, scroll down until you see the category for "Interest and Dividends." Click the "Show more" dropdown arrow, and then select "Start" or "Revisit" next to the line item "Interest on 1099-INT."

2. Choose How to Enter Your Form
TurboTax will first ask if you want to import your 1099-INT from your bank. TreasuryDirect does not support direct import, so you'll need to enter it manually. Select the option that says, "I'll type it in myself."

3. Enter the Payer and Income Information
Now you'll see a screen that looks like a blank Form 1099-INT. Carefully transfer the information from your TreasuryDirect PDF to the corresponding boxes in TurboTax.

• Payer's Name: Enter "U.S. Dept. of the Treasury, Bureau of the Fiscal Service" or "TreasuryDirect," as shown on your form.
• Box 1. Interest Income: Enter the amount of total interest income you received. This is the top-line number from your form.
• Box 3. Interest on U.S. Savings Bonds and Treasury Obligations: Enter the amount from this box. This is the most important box on the form. For a 1099-INT from TreasuryDirect, the amount in Box 3 should be the same as the amount in Box 1.

Accurately entering the amount from Box 3 is the key to telling TurboTax that this interest comes from a federal source. This income is subject to federal income tax, but it is exempt from all state and local income taxes. By filling out Box 3, you ensure the software automatically removes this income from your state tax return, potentially saving you a significant amount of money.

A Common Special Case: The Education Savings Bond Program

If you paid for higher education expenses during the year, you may be able to exclude some or all of your savings bond interest from federal tax. This powerful tax benefit has specific requirements you must meet:

• The proceeds from redeeming Series EE or Series I savings bonds were used to pay for qualified higher education expenses.
• The expenses were for you, your spouse, or a dependent you claim on your return.
• The bond must have been issued after 1989 to a person who was at least 24 years old at the time of issuance.
• Your modified adjusted gross income (MAGI) must be below the annual limit for this exclusion. The income limits are adjusted for inflation each year.
• You cannot file with the "Married Filing Separately" status.

After you enter your 1099-INT, TurboTax will ask a series of follow-up questions to see if you qualify for special tax treatment. On the screen titled "Tell us if any of these uncommon situations apply," be sure to check the box for "We cashed in savings bonds to pay for education."

On the next screen, TurboTax will ask you to enter the amount of your total qualified education expenses. The software will then calculate the exact amount of your savings bond interest that can be excluded from your taxable income based on your income and the amount of expenses you paid.

How to Handle 1099-OID and 1099-B Forms

If your investments generated a 1099-OID or 1099-B, the process is very similar but starts in a different part of the income section.

For a Form 1099-OID from TreasuryDirect:

1. In the "Interest and Dividends" category, select "Start" or "Revisit" next to "Interest on 1099-OID."
2. Choose to type the form in yourself.
3. Enter the payer's name (e.g., "TreasuryDirect") and fill in the boxes exactly as they appear on your PDF form. Key boxes include Box 1 "Original issue discount" and Box 2 "Other periodic interest."
4. Pay close attention to Box 8, "Original issue discount on U.S. Treasury obligations." Just like Box 3 on the 1099-INT, this amount signals to TurboTax that the income is exempt from state and local taxes.

For a Form 1099-B from TreasuryDirect:

1. Scroll down to the "Investments and Savings" section of your income summary. Click the "Show more" dropdown.
2. Select "Start" or "Revisit" next to the category for "Stocks, Cryptocurrency, Mutual Funds, Bonds, Other."
3. Again, select the option to enter the information manually.
4. You'll need to provide details from your 1099-B, like the proceeds from the sale (Box 1d), your cost basis (Box 1e), and acquisition and sale dates. This information allows TurboTax to calculate your capital gain or loss correctly.

Review and Finalize Your Entry

After entering the information from any of these forms, click "Continue" and proceed through the remaining interview questions. TurboTax will then take you back to your income summary, where you should see the Treasury interest added to your total income.

The best way to confirm you did it correctly is to glance at your state tax return summary before you file. You should see a subtraction or deduction for "U.S. Government Interest" or similar language, which confirms the income has been properly excluded for state tax purposes. By following these steps, you can be confident your TreasuryDirect income is reported accurately, fulfilling your federal obligation while securing your state tax exemption.

Final Thoughts

Reporting your TreasuryDirect 1099 in TurboTax is straightforward when you know which form to use and where the information goes. The key is ensuring the interest is correctly flagged as coming from U.S. obligations in Box 3 (for a 1099-INT) or Box 8 (for a 1099-OID), as this is the trigger for the valuable state tax exemption.

While software makes data entry simple, tax professionals often need to research the underlying rules—like the detailed MAGI phaseouts for the education exclusion or how to handle accrued interest for a decedent. We designed a tax research assistant, Feather AI, that gives practitioners instant, citation-backed answers to these questions, allowing them to provide advice with complete confidence.