How is interest income earned by U.S persons under the Insured Bank Deposit Sweep Program reported for tax purposes?

Form 1099-INT reports interest income paid to your securities and commodities account for the year, including securities held outside the US (i.e., bonds issued by foreign entities). Interest income may be subject to backup withholding. Form 1099-INT reports any backup withholding as federal income tax withheld. Original issue discount (OID), although a form of interest, is reportable on Form 1099-OID…

You will earn interest at IBKR's published rates based on your total settled cash balances, regardless of where your cash is held.  

Interest on Insured Bank Deposit Sweep Program balances will accrue daily from the day funds are deposited into a program bank through the business day preceding the date of withdrawal from that bank. Interest will be credited monthly. The specific program bank assigned to your account does not impact the interest rate you receive…

Interest income is reported in box 1 of the Form 1099-INT for U.S. tax payers. This box includes:

• Credit interest on long cash balances
• Credit interest associated with proceeds from short stock sales…

Interest paid under the Insured Bank Deposit Sweep Program to non-U.S persons is not subject to withholding as long as the client has a valid Form W-8 on record. Interest paid is reported on the annual Form 1042-S…