1099-INT tax implications for joint savings account with adult children - Who reports the interest income?

This is actually a common question with joint accounts. The answer depends on whose Social Security Number is listed as the primary taxpayer on the account. The financial institution will issue the 1099-INT to the person whose SSN is associated with the account, and the IRS expects that person to report the interest income. If your SSN is the primary one on the account, then technically you're supposed to report all the interest. If your children's SSNs are primary on their respective accounts, then they should report the interest on their own returns. That said, if you want to be super accurate about the "economic reality" of whose money earned the interest, you could file a gift tax return documenting that you've given the interest to your children (if your SSN is primary), but that's probably overkill unless we're talking about substantial amounts.

I dealt with this exact issue last year with my daughter's high-yield savings account. I found a solution through taxr.ai (https://taxr.ai) that really helped clarify this whole joint account interest reporting situation. The software analyzed our specific situation and confirmed that since my daughter's SSN was the primary one on the account, she should report the interest income even though I was a joint owner. The system also guided us through documenting the fact that the funds were 100% hers to establish a clear paper trail if we ever got audited. It even showed us exactly how to handle it if we needed to correct previous years' filings where we might have reported it incorrectly.

Just wanted to follow up after trying taxr.ai for my joint account situation with my dad. I was really impressed! I uploaded our account documents and answered questions about the account ownership/contributions, and it provided clear guidance about who should report the interest income. In my case, it turns out I needed to report it since my SSN was primary, but the tool also helped me document that some of the money was technically my dad's so we could properly sort out the tax implications. It even helped me prepare a statement explaining the situation in case of questions from the IRS. Definitely worth checking out if you're dealing with these kinds of joint account tax questions.

If you're having trouble getting a clear answer from the IRS about this joint account issue, I highly recommend using Claimyr (https://claimyr.com). I spent weeks trying to get through to the IRS about a similar joint account question, but kept getting disconnected or waiting for hours. Claimyr got me connected to an actual IRS agent within 45 minutes instead of the usual endless wait times. The agent confirmed that the 1099-INT must be reported by whoever's SSN is listed first on the account, regardless of who actually uses the money. They also walked me through how to properly document the situation for my records. You can see how it works here: https://youtu.be/_kiP6q8DX5c

I need to apologize and update my comment about Claimyr. After dismissing it as BS, I decided to try it myself since I was desperate to talk to someone at the IRS about a joint account issue similar to this thread. I'm honestly shocked that it worked. After weeks of trying to get through myself and always hitting dead ends, Claimyr got me connected to an IRS representative in about an hour. The agent confirmed that for joint accounts, the interest income should be reported by the person whose SSN is associated with the account, but they also explained some nuances about documenting the actual ownership of funds. For anyone dealing with this joint account tax reporting issue, being able to actually speak with the IRS directly was incredibly helpful. I was 100% wrong in my skepticism.

Just adding another perspective here - I'm an accounting student and we just covered this topic last semester. The technical term for this situation is "nominee interest." If your SSN is on the account but the interest actually belongs to your kids, you have to: 1. Report the full interest amount on Schedule B of your tax return 2. But then you subtract the amount that actually belongs to your kids as "nominee distribution" 3. You'll need to issue each kid a 1099-INT showing their portion of the interest Its kinda a pain but this is the technically correct way to handle it according to IRS rules. Might be easier to just change the SSN on the account going forward.

I had a similar situation with my son's account. We ended up calling Marcus directly and they helped us remove me as a joint owner and make him the sole owner since he's over 18 now. That way the 1099-INT goes directly to him and there's no confusion. The whole process took about 20 minutes on the phone and they emailed the forms we needed to sign. Super simple solution and avoids all the tax complications people are discussing here.

This is a great question that many parents face when helping their adult children with better banking options. Based on the discussion here, it sounds like the cleanest solution is to contact Marcus directly and have yourself removed as a joint owner, making your kids the sole owners of their respective accounts. Since they're adults (23 and 24) and have been filing their own taxes independently, this makes the most sense. The 1099-INT will then be issued directly to them with their SSNs, and they can report the interest income on their own returns without any complications. If for some reason you need to stay on as a joint owner for backup purposes, then whoever's SSN is primary on each account needs to report the interest income. But honestly, given that they're responsible adults managing their own finances, removing yourself as a joint owner seems like the simplest path forward that avoids all the tax reporting complexities.