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When is CD interest taxed?

I invested in certificates of deposit for the first time in 2023, so I'm trying to figure out how CD interest is taxed.

This article[1] indicates that interest on short term CDs (less than 1 year) is only taxed in the year that the CD matures. This would mean that none of the interest on an 11-month CD that matures in January of

2024 is taxable in 2023; it will all be taxed in 2024, even though most of it was actually earned in 2023.

Is this correct? If so, is this rule written down anywhere? (My searches for anything official on this topic have come up empty thus far.)

[1]
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Reply to
Ian Pilcher
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According to Ian Pilcher snipped-for-privacy@gmail.com:

and

Certificates of deposit and other deferred interest accounts. If you buy a certificate of deposit or open a deferred interest account, interest may be paid at fixed intervals of 1 year or less during the term of the account. You generally must include this interest in your income when you actually receive it or are entitled to receive it without paying a substantial penalty. The same is true for accounts that mature in 1 year or less and pay interest in a single payment at maturity. If interest is deferred for more than 1 year, see Original Issue Discount (OID), later.

So yes, you pay tax when the CD matures. Your bank or broker should send you a 1099-INT saying how much.

Reply to
John Levine

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