How to File a 1099 OID

How to File a 1099 OID
Stock certificates issued and sold under par value with a maturity of longer than a year will have to be reported on IRS Form 1099 OID.

Step 1

Obtain an IRS original copy of the 1099 OID form. You can obtain one at the offices of most local tax preparers or by contacting the IRS. To order official IRS forms, call 1-800-TAX-FORM (1-800-829-3676). You may also order forms online. It is not acceptable to download the form and file it with your tax returns.

Step 2

Check the form sent by the debt issuer to make certain that the top of the form is marked either “void” or “corrected.” Make certain that your name, address, phone number and employee identification are correct and that any other information that is included on the form is valid. If not, contact the issuer, have the information corrected and request that another OID to be issued to you.

Step 3

Complete Form 1096, which requires you to fill in the basics of name, address and other identifying information. Mark box 96, which indicates that you are filing an 1099 OID.

Step 4

Complete box 1, which shows the OID obligation for the part of the year you owned the OID. If it is the full year, the number should be reflected on the statement issued by the OID issuer. However, if there are complicating factors such as payment of a bond premium, consult IRS Publication 212, "Guide to Original Issue Discount (OID) Instruments," for details on how to calculate the correct OID.

Step 5

Complete boxes 2 through 7. Fill in box 2 to show other interest separate from the OID and Box 3 to show interest or principal that you forfeited by withdrawing the money before the OID has reached maturity. Complete sections 4 through 7 if any apply, but they are generally applicable to unusual circumstances. File the form with your 1099 and form 1096.