Who Pays Taxes on a Joint Account?

Who Pays Taxes on a Joint Account?

Joint account holders are typically all responsible for paying taxes on their portion of interest earned on a joint account.

But, there's a hitch: Financial institutions report interest on IRS Form 1099-INT, which only has room to list one recipient, the primary account holder. Unless the primary account holder takes further action (which we'll talk about later), the IRS attributes all of the account's interest to one person. That person can choose to pay all of the taxes themselves, or take steps to spread the joy (and the tax liability) to the other account holders appropriately.

Learn more: Individual vs. Joint Savings Accounts: What's the Difference?

How to Find Interest Earned on a Joint Account

You can check the amount of interest you earned by logging in to your account and looking for your January account statement; it should show the prior year's interest.

If your account earned at least $10 in interest, the bank or credit union will issue a 1099-INT. In 2026 (for the 2025 tax year), 1099-INT forms must be received by February 2. If you've opted for digital notifications, you should be able to access your 1099-INT online or by app. If not, check your mail. Your 1099-INT will show the official recipient and the total amount of interest paid.

How to Report Interest Earned on a Joint Account

If your name is on the 1099-INT, you can report joint interest on a joint or individual tax return. Alternatively, you can use Form 1099-INT to assign out the portion of interest that belongs to your co-owners and have them report the interest on their tax return.

Here's more detail:

Option 1: Assign Interest to All Co-Owners

If you want to share the interest—and the tax burden—between account holders, you can issue 1099-INT forms to notify the IRS and your co-owners that the interest is shared among multiple parties. You don't need to file a 1099-INT if you have a joint account with your spouse. Spouses can report joint account interest on joint or separate tax returns without separate 1099s. Otherwise, you (as the original recipient of the 1099-INT) should follow these steps:

1. Send a 1099-INT to each of your co-owners. List yourself as the payer and your co-owner as the recipient. Send Copy B to your co-owner. Send Copy A to your local IRS Service Center, along with Form 1096, showing the IRS how many 1099s you issued.
2. Complete Schedule B on your Form 1040 tax return, following instructions for "nominees," to show the IRS (again) that some of the interest reported as yours belongs to other taxpayers.

Option 2: File a Joint Return

Married account holders filing joint tax returns can simply report joint interest on line 2B of their Form 1040. When you file jointly, you automatically share the tax liability.

Learn more: Should Married Couples Have Joint Checking Accounts?

Option 3: Claim the Interest Yourself

If you're the primary account holder and you've received a 1099-INT reporting all of the interest paid on the account as yours, you can choose to pay the entire tax bill yourself. In many cases, this is the simplest approach, and it especially makes sense if you didn't earn much interest in the first place. If you made $100 in interest and you're in the 22% tax bracket, your tax is $22. Worst-case scenario, you could use joint funds to reimburse yourself.

The Bottom Line

Reverse engineering the tax strategy on a joint account is doable, but it may be wiser to work out a plan before you open an account with your spouse, partner, child or aging parent. Decide in advance who will be responsible for tracking down tax forms, reporting interest and paying taxes for your joint account, so there's less worry about interest income falling through the cracks.