Are US savings bond tuition plans tax free or do I have to report the distributions on my tax return?

Interest received from US savings bonds issued after 1989 may be excludable from income on your tax return if you pay qualified higher educational expenses during the tax year and meet these tax requirements:

	you must be at least age 24 before the month in which the US savings bonds are purchased;
	the US savings bonds must be issued in your name or jointly with your spouse;
	in the tax year of redemption of the US savings bonds you must pay qualifying tuition and educational expenses for yourself, your spouse, or your dependents;
	to qualify, tuition and educational expenses must be paid to a college, university, or vocational school that meets federal financial aid standards. Room and board are not qualifying expenses.

Additional tax rules apply. Excludable interest from US savings bonds is figured on Form 8815 and then shown on Schedule B of Form 1040 or Schedule 1 of Form 1040A.

Related tax information about US savings bond tuition plans

Tax Directory Topics:
Academic Scholarships
Educational Assistance Exclusion
Education IRAs
Hope Tax Credit
Lifetime Learning Tax Credit
Qualified Tuition Programs
Student Loan Interest Tax Deduction
Dependent Tax Issues

IRS publications about US savings bond tuition plans:
For further information about US savings bond tuition plans refer to IRS Publication 970, Tax Benefits for Higher Education; IRS Publication 508, Educational Expenses; IRS Publication 1577,

Applying for Educational Financial Aid; and IRS Publication 520,

Scholarships and Fellowships. Also see IRS Publication 17,

Your Federal Income Tax. Please read this IMPORTANT Editor's Note regarding navigating IRS publications with Adobe Acrobat Reader.
IRS publications can also be ordered by calling 1-800-829-3676.

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