Type of Interest Income

Source

CD

Banks and Credit Unions

Taxable as earned

Checking accounts

Banks and Credit Unions

Taxable as earned

Exempt interest dividends

Mutual funds

Non taxable

Gifts/Service on opening an account

Banks and Credit Unions

Taxable as received

Interest on income tax refunds

Federal/State/Local Government

Taxable as earned

Insurance dividends left on deposit

Insurance company

Taxable as earned

Installment Sale

Purchaser

Taxable as received

Municipal Bonds

State/Local Government

Non taxable

Personal Loans

Individual borrower

Taxable as received

Roth IRA

Brokerages

Nontaxable

Savings Accounts

Banks and credit unions

Taxable as earned

Series E or EE Bonds

U.S Treasury

Taxable at maturity or if cashed (The taxpayer may elect to pay taxes as earned.) (Series EE bond is a qualified bond if the proceeds are used to pay for qualified higher education expenses and if it is issued after 1989. Then its not taxable

Series I Bonds

U.S Treasury

Nontaxable if qualified bond proceeds are used to pay for qualified higher education expenses.

Series H or HH Bonds

U.S Treasury

Taxable as earned

Traditional IRA

Banks and Brokerages

Taxable at maturity

Treasury Bills (T-Bills)

U.S Treasury

Taxable as earned

Treasury Notes and Bonds

U.S Treasury

Taxable as earned