Chapter 6
Education Savings Bond Program

Generally, you must pay tax on the interest earned on U.S. savings bonds. If you do not include the interest in income in the years it is earned, you must include it in your income in the year in which you cash in the bonds.

However, you may not have to include the interest in your income in the year in which you cash in the bonds if you pay higher education expenses during that year for you, your spouse, or a dependent for whom you claim an exemption.

Who Can Cash In Bonds Tax Free?

How Do You Figure the Tax-Free Amount?

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