The short answer
Yes. Taxable interest from banks, CDs, and similar accounts, and dividends from stocks and funds, are income you report on your federal tax return — even small amounts, and even if you never received a form. Interest is generally taxed at ordinary income rates. Dividends are split into ordinary dividends (ordinary rates) and qualified dividends (the lower capital gain rates). Not all dividends are taxed the same way.
Interest and Form 1099-INT
- Most interest is taxable in the year it becomes available to you.
- A payer generally sends Form 1099-INT when interest is $10 or more. That is the payer's reporting threshold — you report all taxable interest, with or without a form.
- Tax-exempt interest (for example, from many municipal bonds) is reported as information only. Reporting it does not make it taxable.
Dividends and Form 1099-DIV
| 1099-DIV box | What it shows | How it is generally taxed |
|---|---|---|
| Box 1a — total ordinary dividends | All ordinary dividends paid to you | At ordinary income rates, except the qualified part |
| Box 1b — qualified dividends | The part of Box 1a that qualifies | At the 0%, 15%, or 20% capital gain rates |
To be qualified, you generally must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. For preferred stock with dividends due to periods totaling more than 366 days, the test is more than 90 days during the 181-day period that begins 90 days before the ex-dividend date. Some dividends never qualify. Box 1b is a starting point, but it is not the final word: payers may include dividends in Box 1b when it is impractical for them to determine whether the holding period was met, so check your own holding period before treating a Box 1b amount as qualified. For the other boxes on your forms, such as capital gain distributions and return of capital, see Form 1099-DIV and 1099-INT explained box by box. For the capital gain rate thresholds by year, see I sold stock — how are capital gains taxed?
Reinvested dividends count too. If your dividends are automatically reinvested through a dividend reinvestment plan, they are generally still dividend income you report, even though you never received the cash. Because reinvested dividends are part of your ordinary dividends, include them when you check the $1,500 Schedule B threshold.
When Schedule B is required
You generally must file Schedule B if your taxable interest or ordinary dividends are over $1,500. Other situations also require it, such as receiving interest or dividends as a nominee, or having a financial account in a foreign country (Part III asks about foreign accounts).
Example (illustrative)
In 2025, Ray received a 1099-INT showing $420 of savings interest and a 1099-DIV showing $900 in Box 1a, of which $700 is in Box 1b, and Ray met the holding period for those shares. He also earned $8 of interest at another bank that sent no form. Ray reports $428 of interest and $900 of ordinary dividends; $700 of the dividends is taxed at the qualified dividend rates. Because neither total is over $1,500, Schedule B is not required for that reason alone.
Reporting interest on your tax return is separate from reporting a foreign account on the FBAR or Form 8938. Interest from a foreign bank is still income; the account itself may have its own reporting. See Do I need to report a Taiwan or foreign bank account?
At higher incomes
Interest and dividends are investment income for the separate 3.8% net investment income tax, which can apply when modified adjusted gross income exceeds $200,000 (single or head of household), $250,000 (married filing jointly or qualifying surviving spouse), or $125,000 (married filing separately). See the net investment income tax guide. If you borrowed to buy investments, see investment interest expense.