• December 7, 2023
  • Posted by General Electric Credit Union
  • 2 read

Understanding Taxes on Earned Interest from Your Checking or Savings Account

The best account options, like a high-yield savings account (HYSA) and select checking accounts, also allow you to earn interest on your balance. However, it's important to be aware of the tax implications associated with this earned interest. Use this guide to understand what the IRS requires and how to get your finances in order for tax time. 

IRS requirements for earned interest

You should receive a Form 1099-INT from any financial institution you have an account with that earned $10 or more in interest during the calendar year. The IRS views earned interest as part of your total gross income. For this reason, it’s taxed the same amount as your ordinary income. The same goes for one-time cash bonuses, such as for a new account opening. If you were expecting a refund, this may slightly reduce what you get back. 

General Electric Credit Union (GECU) members with a Thrive Money Market, certificate, Choice Checking, or Amplified High-Yield Checking account can access their 1099-INT form(s) by requesting them via Secure Email or Secure Chat from within Online Banking or our mobile app.1 Forms will also be mailed out to members before January 31st.

Don’t let IRS requirements catch you by surprise

Depending on your balance, the amount of interest you earn from an account can really add up. For example, if you open a 12-month certificate with an initial $5,000 deposit that earns 5% interest, you will make over $250 in interest. Say your total gross income, including these interest earnings, is between $44,725 to $95,375 for 2023. You’d have to apply a 22% tax rate to those earnings. For $250, that would be $55 paid back to Uncle Sam. 

GECU accountholders can check their balance within Online Banking or our mobile app to get a feel for how much interest they earn on an account. While you don’t necessarily need to crunch the numbers ahead of the April 15th deadline, it’s beneficial to keep your personal income tax liability in mind so there are no surprises. Consult an accountant for guidance tailored to your specific financial situation. 

Back to blog home