If you paid a penalty for withdrawing money early from a certificate of deposit (CD) or another time deposit account, the amount of the penalty is reported on the tax form you received from your financial institution.
Where Can I Find My Early Withdrawal Penalty on My Tax Forms?
- Check Form 1099-INT, Interest Income, and look for the amount in Box 2 (Early Withdrawal Penalty).
- If you received Form 1099-OID, Original Issue Discount, find the penalty amount in Box 3 (Early Withdrawal Penalty).
- If you received multiple Forms 1099-INT or 1099-OID, add all the penalty amounts together to determine your total early withdrawal penalty for the year.
Be sure to review all forms you received from banks, credit unions, or other financial institutions. If more than one form includes an early withdrawal penalty, combine the amounts before entering them into your tax return.
Why This Matters
An early withdrawal penalty can affect your taxable income. Entering the correct amount helps ensure your return is accurate and may reduce the amount of income tax you owe.