Taxable and Non Taxable Interest Income – USA
Type of Interest Income |
Source |
|
CD |
Banks and Credit Unions |
Taxable as earned |
Checking accounts |
Banks and Credit Unions |
Taxable as earned |
Exempt interest dividends |
Mutual funds |
Non taxable |
Gifts/Service on opening an account |
Banks and Credit Unions |
Taxable as received |
Interest on income tax refunds |
Federal/State/Local Government |
Taxable as earned |
Insurance dividends left on deposit |
Insurance company |
Taxable as earned |
Installment Sale |
Purchaser |
Taxable as received |
Municipal Bonds |
State/Local Government |
Non taxable |
Personal Loans |
Individual borrower |
Taxable as received |
Roth IRA |
Brokerages |
Nontaxable |
Savings Accounts |
Banks and credit unions |
Taxable as earned |
Series E or EE Bonds |
U.S Treasury |
Taxable at maturity or if cashed (The taxpayer may elect to pay taxes as earned.) (Series EE bond is a qualified bond if the proceeds are used to pay for qualified higher education expenses and if it is issued after 1989. Then its not taxable |
Series I Bonds |
U.S Treasury |
Nontaxable if qualified bond proceeds are used to pay for qualified higher education expenses. |
Series H or HH Bonds |
U.S Treasury |
Taxable as earned |
Traditional IRA |
Banks and Brokerages |
Taxable at maturity |
Treasury Bills (T-Bills) |
U.S Treasury |
Taxable as earned |
Treasury Notes and Bonds |
U.S Treasury |
Taxable as earned |