What is nominee interest?
Nominee interest is interest income that you receive on behalf of another person. So part or all of the interest income belongs to someone else even though you receive the Form 1099-INT (or Form 1099-OID). The amount you enter for nominee interest will reduce the amount of taxable interest income shown on your return.
For example, you and your brother own a bank account and you receive a Form 1099-INT with $100 in interest income. If $30 of that interest income belongs to your brother, then you need to enter the Form 1099-INT and enter the full $100 shown in Box 1 of the Form 1099-INT, but then you enter $30 as nominee interest so you end up only reporting $70 in taxable interest income on your tax return.
For example, you and your brother own a bank account and you receive a Form 1099-INT with $100 in interest income. If $30 of that interest income belongs to your brother, then you need to enter the Form 1099-INT and enter the full $100 shown in Box 1 of the Form 1099-INT, but then you enter $30 as nominee interest so you end up only reporting $70 in taxable interest income on your tax return.
