For U.S. individual investors, Treasury bill interest is generally taxable on the federal income tax return but exempt from state and local income taxes. If you hold a T-bill to maturity, the discount between what you paid and its face value is generally treated as interest and reported when the bill is paid at maturity.
How Treasury bill interest is taxed
Treasury bills are direct obligations of the U.S. government, usually issued at a discount. You pay less than the bill’s face value and receive the face value when it matures; the difference is generally interest income, not a capital gain in the ordinary held-to-maturity case. The IRS explains this treatment in Publication 550.
Federal income tax
Interest from Treasury bills is subject to federal income tax. For a bill held through maturity, the interest is generally recognized when the bill is paid at maturity. The exact tax owed depends on your broader tax situation.
State and local income tax
The IRS states that interest income from Treasury bills, notes, and bonds is exempt from all state and local income taxes. State forms and the mechanics for claiming the exemption can differ, so check the instructions for the state return you file rather than assuming a particular line or subtraction method.
Free tools Windows power users keep installed
One-click scans. No signup required.
#1 Best Overall
- Profitability calculations; cash flow function Calculates NPV and IRR for uneven cash flows
- Time-value-of-money and Amortization keys solve problems including: pension calculations, loans, mortgages, etc.
- Ideal calculator for students, managers and statisticians
- Built-in functionality : List-based one- and two-variable statistics with four regression options: linear, logarithmic, exponential and power
- The BA II Plus calculator is approved for use on the following professional exams: Chartered Financial Analyst exam. GARP Financial Risk Manager (FRM) exam. Certified Management Accountants exam
Where to report T-bill interest
The IRS generally identifies Form 1099-INT, box 3, for Treasury bill interest. A broker may include the figure in a composite tax statement. Keep your purchase and maturity records and reconcile them with the statement.
If you do not receive an information return, the interest is still reportable. The Schedule B instructions generally direct taxable interest reported on Forms 1099-INT or 1099-OID to line 1; consult the instructions for the tax year you are filing because forms and filing requirements can change. See the IRS Schedule B instructions.
Rank #2
- PROFESSIONAL FINANCIAL CALCULATOR : Built-in TVM, IRR, NPV. Engineered for business analysts, real estate investors, accountants, and finance students.
- ADVANCED CASH FLOW & AMORTIZATION : Execute time value of money, break-even analysis, depreciation schedules, and bond pricing. Trusted for professional exam prep", MBA coursework, and banking certifications.
- CATIGA CF-300 : Flip-open hard case with a snap-close design for a secure fit. Compact and portable: designed for daily professional use in office, classroom, or on-site.
- ALL-IN-ONE FOR PROFESSIONALS : From NPV/IRR for real estate analysis to statistical calculations for business analysts. Handles probability, linear regression, and complex financial formulas.
- MORTGAGE, LOAN & INVESTMENT CALCULATOR : Covers bond pricing, loan amortization, investment analysis, and exam-level computations. Your go-to accounting calculator, business calculator, and real estate calculator in one device.
When a purchase or sale needs more specific treatment
Buying a bill for more than face value
If you bought a T-bill for more than its face value, Publication 550 says the premium is generally reported as a section 171 deduction when the bill is paid at maturity. This specialized rule should not be assumed to apply automatically to every secondary-market purchase.
Short-term discount obligations and missing purchase price
IRS Publication 1212 includes a special information-reporting rule for short-term discount obligations redeemed at maturity. When the owner’s purchase price cannot be established, the rule uses the noncompetitive weighted-average accepted auction discount price for the longest-maturity T-bill maturing on the same date as the redeemed bill. This is a reporting rule, not a complete tax calculation for every purchase or sale. Review Publication 1212 and seek tax advice if your basis or transaction history is unclear.
Rank #3
- HP 10BII+ FOR STUDENTS & PROFESSIONALS – This HP calculator is built for business, finance, accounting, and statistics courses. Perfect for learners and professionals who need to solve common financial problems quickly without memorizing formulas or relying on spreadsheets.
- 100+ FUNCTIONS FOR REAL WORLD MATH – Quickly solve time value of money, interest rates, loan payments, NPV, IRR, cash flows, and more. The 10bII+ also includes probability distributions for statistics courses—a feature not often found in financial calculators.
- ALGORITHMIC INPUT WITH DEDICATED KEYS – This high-school/college calculator uses algebraic and chain logic with minimal keystrokes. Layout appears the same as standard calculators for easy learning. Dedicated keys give quick access to commonly used financial and statistical functions
- APPROVED FOR MAJOR EXAMS – The HP 10bII+ algebra calculator is permitted for use on SAT, PSAT/NMSQT, and AP tests. An ideal statistics calculator and business calculator for school finance and accounting students preparing for class, coursework, or standardized exams.
- INCLUDES TRAVEL CASE, CLEANING CLOTH & BATTERIES– Slim, durable, and easy to keep on hand or store in a backpack or locker. Includes a protective case, cleaning cloth, and batteries so it’s ready out of the box. Large screen with clear contrast (non-backlit) is easy to read during exams or lectures.
Secondary-market sales, unusual basis records, entities, and nonresident tax situations can involve additional rules beyond the general individual-investor treatment described here.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Keep the tax categories separate
The federal taxability, state and local exemption, timing of recognition, and information reporting are separate questions. The IRS rules described here concern Treasury bills themselves; they should not automatically be applied to money market funds, bond funds, or other investments that may hold Treasury securities.
Quick Recap
Best Value
- Brand New in box; The product ships with all relevant accessories
- Dedicated keys allow easy access to common financial and statistics functions
- Easy-to-use design provides business, finance and statistical calculations fast
- Specially designed to meet the mathematical needs
Rank #4
- Solves time-value-of-money calculations such as annuities, mortgages, leases, savings, and more
- Performs cash-flow analysis for up to 32 uneven cash flows with up to 4-digit frequencies
- Calculates various financial functions: Net Future Value Net present Value Modified Internal Rate of Return Internal Rate of Return Modified Duration Payback Discounted Payback
- The Texas Instruments BAII Plus Professional features an Automatic Power Down (APD) function for extended battery life
- Prompted display guides you through financial calculations showing current variable and label. Ten-digit display
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
