What tax benefits may be available if Savings Bond redemption amounts are used to pay education expenses?
Qualified taxpayers may be able to exclude all or part of the interest earned from eligible Savings Bonds issued after 1989 when paying qualified higher education expenses. Savings Bonds must be issued in the name of a taxpayer age 24 or older at the time of issuance. Other restrictions and income limits apply. For example, for single taxpayers, the tax exclusion begins to be reduced with a $67,100 modified adjusted gross income and is eliminated for adjusted gross incomes of $82,100 and above. For married taxpayers filing jointly, the tax exclusion begins to be reduced with a $100,650 modified adjusted gross income and is eliminated for adjusted gross incomes of $130,650 and above. Married couples must file jointly to be eligible for the exclusion.
