1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

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Topic Author
neworchid
Posts: 4
Joined: Sat Jan 04, 2020 6:36 pm

1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

Post by neworchid »

Hi everyone,
I tried re-investing 4-week and 13-week T-Bills in 2024.

I just compared all the items on the 2024 1099-INT against all the TD interest deposits in our bank. I noticed that with the reinvested 4-week T-Bill, the interest income is recognized (dated) by Treasury Direct on the 1099-INT, 4 weeks later than when the interest was deposited into our bank account. Similar pattern on the reinvestment of a 13-week T-Bill: interest income recognized (dated) on 1099-INT 13 weeks later than when the interest hit our bank account.

This poses an issue for our tax reporting: The interest deposits we got in Dec 2024 are not included in the 2024 1099-INT but in the 2025 1099-INT.

Dilemma: Use the 1099-INT from Treasury Direct (which seems to be using some deferred method) or manually calculate all the interest received in our bank from Treasury Direct ?

Anyone else noticed this before, and how did you handle it?
nalor511
Posts: 6022
Joined: Mon Jul 27, 2015 1:00 am

Re: 1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

Post by nalor511 »

neworchid wrote: Mon Feb 03, 2025 4:12 pm Hi everyone,
I tried re-investing 4-week and 13-week T-Bills in 2024.

I just compared all the items on the 2024 1099-INT against all the TD interest deposits in our bank. I noticed that with the reinvested 4-week T-Bill, the interest income is recognized (dated) by Treasury Direct on the 1099-INT, 4 weeks later than when the interest was deposited into our bank account. Similar pattern on the reinvestment of a 13-week T-Bill: interest income recognized (dated) on 1099-INT 13 weeks later than when the interest hit our bank account.

This poses an issue for our tax reporting: The interest deposits we got in Dec 2024 are not included in the 2024 1099-INT but in the 2025 1099-INT.

Dilemma: Use the 1099-INT from Treasury Direct (which seems to be using some deferred method) or manually calculate all the interest received in our bank from Treasury Direct ?

Anyone else noticed this before, and how did you handle it?
Were these tbills that matured on 12/31/2024? If so, the interest is indeed properly in ty2025
Topic Author
neworchid
Posts: 4
Joined: Sat Jan 04, 2020 6:36 pm

Re: 1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

Post by neworchid »

Both are still in the rolling/re-investment mode; we expect more interest payments this year thru 2026.

Didn't realize this reinvestment would create a tax dilemma :(
Nver2Late
Posts: 958
Joined: Tue Jan 26, 2021 10:30 am

Re: 1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

Post by Nver2Late »

The difference between what shows up on the 1099 and what shows up in your account is the price difference between the interest received and the cost of the new issue.

Example: Purchased $100 t-bill at $90, at maturity/autoroll you receive $100. But the new tbill price is say $92.
$10 shows up on the 1099-int.
$8 shows up on your bank statement.
"Better is the enemy of good." Good is good.
nalor511
Posts: 6022
Joined: Mon Jul 27, 2015 1:00 am

Re: 1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

Post by nalor511 »

neworchid wrote: Mon Feb 03, 2025 5:17 pm Both are still in the rolling/re-investment mode; we expect more interest payments this year thru 2026.

Didn't realize this reinvestment would create a tax dilemma :(
I don't think it does. I think you're probably just not understanding what happened, but the 1099 is correct
ATucker
Posts: 21
Joined: Fri Dec 22, 2023 4:49 pm

Re: 1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

Post by ATucker »

I had to wrap my head around this a couple of years ago. TD is correct on 1099, the interest stated based on end date of t-bill, although from a bank standpoint you paid less than full at auction time so it seems interest is at beginning due to income from autoroll of the next bill, that is a illusion. After going thru all my buy and sell I finally saw how the one's crossing year end worked but I ended up having to use excel and calendar to finally convince myself. So bottom line enter the values on the TD 1099 you download.
Topic Author
neworchid
Posts: 4
Joined: Sat Jan 04, 2020 6:36 pm

Re: 1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

Post by neworchid »

ATucker wrote: Mon Feb 03, 2025 6:25 pm I had to wrap my head around this a couple of years ago. TD is correct on 1099, the interest stated based on end date of t-bill, although from a bank standpoint you paid less than full at auction time so it seems interest is at beginning due to income from autoroll of the next bill, that is a illusion. After going thru all my buy and sell I finally saw how the one's crossing year end worked but I ended up having to use excel and calendar to finally convince myself. So bottom line enter the values on the TD 1099 you download.
Nver2Late wrote: Mon Feb 03, 2025 6:08 pm The difference between what shows up on the 1099 and what shows up in your account is the price difference between the interest received and the cost of the new issue.

Example: Purchased $100 t-bill at $90, at maturity/autoroll you receive $100. But the new tbill price is say $92.
$10 shows up on the 1099-int.
$8 shows up on your bank statement.
nalor511 wrote: Mon Feb 03, 2025 6:10 pm
neworchid wrote: Mon Feb 03, 2025 5:17 pm Both are still in the rolling/re-investment mode; we expect more interest payments this year thru 2026.

Didn't realize this reinvestment would create a tax dilemma :(
I don't think it does. I think you're probably just not understanding what happened, but the 1099 is correct
Thanks for confirming. I was thinking this illusion must have something to do with the fact that T-Bills are discounted and do not really earn interest. So what we get in the bank is the discount. Am so glad to know others have wrestled with this too :D and understand it better.
nalor511
Posts: 6022
Joined: Mon Jul 27, 2015 1:00 am

Re: 1099-INT for Re-invested T-Bills on Treasury Direct Not Matching Actual Amount Received in 2024

Post by nalor511 »

neworchid wrote: Mon Feb 03, 2025 7:09 pm
ATucker wrote: Mon Feb 03, 2025 6:25 pm I had to wrap my head around this a couple of years ago. TD is correct on 1099, the interest stated based on end date of t-bill, although from a bank standpoint you paid less than full at auction time so it seems interest is at beginning due to income from autoroll of the next bill, that is a illusion. After going thru all my buy and sell I finally saw how the one's crossing year end worked but I ended up having to use excel and calendar to finally convince myself. So bottom line enter the values on the TD 1099 you download.
Nver2Late wrote: Mon Feb 03, 2025 6:08 pm The difference between what shows up on the 1099 and what shows up in your account is the price difference between the interest received and the cost of the new issue.

Example: Purchased $100 t-bill at $90, at maturity/autoroll you receive $100. But the new tbill price is say $92.
$10 shows up on the 1099-int.
$8 shows up on your bank statement.
nalor511 wrote: Mon Feb 03, 2025 6:10 pm

I don't think it does. I think you're probably just not understanding what happened, but the 1099 is correct
Thanks for confirming. I was thinking this illusion must have something to do with the fact that T-Bills are discounted and do not really earn interest. So what we get in the bank is the discount. Am so glad to know others have wrestled with this too :D and understand it better.
What you get in the bank is the full redemption value minus what is reinvested. What you get on the 1099 is the full redemption minus what you paid
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