Do Series EE Bonds Offer Any Special Advantages If Used For College Savings?
Yes. Series EE bonds (which may also be called Patriot bonds) are generally inexpensive, low-risk investments whose earnings are exempt from state and local taxes. In addition, in the college savings game, the interest earned by Series EE bonds (and Series I bonds) may be exempt from federal tax if the following requirements are met: • The bond must be issued in the name of one or both parents (not the child’s name), and the owner of the bond must be at least 24 years old • The bond proceeds must be used to pay qualified higher education expenses (generally tuition and fees, not room and board) • The bond must be redeemed (cashed in) by the owner in the year it’s used to pay the qualified education expenses of the owner, the owner’s spouse, or their child • You must file a joint tax return if you’re married • You must fall under established income limits (these limits are adjusted annually for inflation) If you meet these requirements, you’ll pay no federal tax on the interest earned b
