How should Series EE bonds be used in college funds?
These are extremely safe investments. They should be held in the parents names. If the adjusted gross income of you and your spouse at the time of redemption is at or under the amount set by the tax law, the interest on bonds bought after January 1, 1990 is tax-free as long as it is used for tuition or other qualified education costs. If your adjusted gross income is above the threshold amount, the tax break is phased out. This phase-out begins at about $80,000 for married couples filing a joint return.
