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N
nichsteph
February 24, 2024
Question

Do you pay taxes on the interest earned on a 12-month CD, that spans two years, i.e., purchased in March 2023 and matures in March 2024?

  • February 24, 2024
  • 1 reply
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    1 reply

    J
    JulieS
    February 24, 2024

    Yes, the interest on a CD is taxable, but when you report it depends on whether it is a short-term CD, or a long-term CD.

     

    For CD terms of one year or less, you will have to pay taxes on interest when it's received. That means if you start your 12 month CD in 2023, the interest is reported when it matures in 2024. 

     

    For CD terms longer than one year, you will have to pay taxes on interest earned each tax year during the CD term. 

     

    In either case, your bank, or broker will let you know how much to report by issuing a 1099-INT for the CD interest. 

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      J
      jrnrph
      March 18, 2024

      I had a 10 month CD in 2023, which matured Feb. 2024, however, I did receive a 1099-INT from my bank.  Must I report this on my 2023 taxes?

      J
      JulieS
      March 18, 2024

      Yes, if you receive a 1099-INT from your bank reporting the interest for 2023, you should include it on your 2023 tax return. 

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