Savings tax guides
Where your savings sit decides how they are taxed. These guides from the YourBest network explain the federal and state rules for the accounts our sister sites rank: savings, CDs, Treasuries, HSAs, 529 plans, bank bonuses and card rewards.
General information, not tax advice. This guide explains how federal and state rules generally work. Your situation may differ; check the official source linked below or ask a tax professional before acting.
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How savings and CD interest is taxed
Form 1099-INT, when interest counts as income, accrued interest on multi-year CDs, and the early-withdrawal penalty deduction.
Treasury and I bond interest: state tax exemption
Why T-bill, note and I bond interest is free of state income tax while bank interest usually is not, with a state-by-state table.
HSA tax rules
Contribution limits, the triple tax advantage, Form 8889, and the states (California and New Jersey) that tax HSAs.
529 plan tax rules
Tax-free withdrawals, Form 1099-Q, K-12 and credential expenses, Roth IRA rollovers, and state deductions.
Bank bonuses and card rewards: what is taxable
Bank account bonuses (1099-INT or 1099-MISC) versus credit card rewards earned by spending (treated as rebates).
Where the rates come from
The rates themselves are tracked daily on our sister sites: high-yield savings, CDs, T-bills, HSAs and 529 plans on YourBestSavings, and card sign-up bonuses on YourBestCards. These guides cover what happens at tax time.
Frequently asked questions
Is interest from a high-yield savings account taxable?
Yes. It is ordinary income in the year it is credited, reported on Form 1099-INT, and taxed by most states.
Which savings are not taxed every year?
Interest and growth inside IRAs, health savings accounts and 529 plans are not taxed each year. Treasury and I bond interest is federally taxable but exempt from state and local income tax, and I bond interest can be deferred until you cash the bond.
All guides
- How savings and CD interest is taxed — Form 1099-INT, when interest counts as income, accrued interest on multi-year CDs, and the early-withdrawal penalty deduction.
- Treasury and I bond interest: state tax exemption — Why T-bill, note and I bond interest is free of state income tax while bank interest usually is not, with a state-by-state table.
- HSA tax rules — Contribution limits, the triple tax advantage, Form 8889, and the states (California and New Jersey) that tax HSAs.
- 529 plan tax rules — Tax-free withdrawals, Form 1099-Q, K-12 and credential expenses, Roth IRA rollovers, and state deductions.
- Bank bonuses and card rewards: what is taxable — Bank account bonuses (1099-INT or 1099-MISC) versus credit card rewards earned by spending (treated as rebates).