Do I have to pay tax on US Savings Bonds?

US Savings Bonds - Series E and EE Bonds, and Freedom Shares

First offered in May, 1941 Series E - US Savings Bonds, and its successor, Series EE - US Savings Bonds, offer tax deferred accumulation of interest until you redeem the US Savings Bonds. Series EE US Savings Bonds have been offered since January 1980. Series EE US Savings Bonds can be purchased for ½ their face value. The difference between the US Savings Bonds purchase price and the redemption value is your taxable interest. You don't have to report the taxable interest on your tax return until you redeem the US Savings Bonds or they finally mature. However, you can make an election to report the taxable interest on your tax return annually. Because US Savings Bonds are issued by the federal government you do not have to pay state tax or local tax on the interest. You'll receive a Form 1099-INT in the tax year that the US Savings Bonds are redeemed. Freedom Shares, which were issued between 1967 and 1970 work the same way as Series E and EE US Savings Bonds.

All of the accumulated interest on E and EE US Savings Bonds is taxable in the tax year that they mature and must be reported on your tax return. One way to avoid the tax is to trade the E or EE US Savings Bonds for HH bonds. This will continue to defer the tax and you won't need to report the tax on your tax return. Special tax rules apply for US Savings Bond Tuition Plans.

US Savings Bonds - Series H and HH Bonds

Series H US Savings Bonds were issued between February 1957 and December 1979. Series H US Savings Bonds were available for purchase or you could exchange your Series E US Savings Bonds for them. Series H US Savings Bonds were bought at face value and pay semi-annual interest which is taxable and must be reported on your tax return.

You must report the accumulated interest from any Series E US Savings Bonds that were exchanged for Series H US Savings Bonds upon redemption or final maturity of the Series H US Savings Bonds on your tax return.

Series HH US Savings Bonds cannot be purchased and are offered only in exchange for Series E and EE US Savings Bonds or Freedom Shares. They pay semi-annual interest that is taxable in the tax year received and must be reported on your tax return.

US Savings Bonds - I-Bonds

I-Bonds are inflation indexed US Savings Bonds which allow the deferral of income tax until the I-Bond is redeemed or it matures at which time you must report the interest on your tax return.

Below is a table of the different kinds of US Savings Bonds, their issue dates, and their final maturity dates.

US Savings Bond Maturity Dates

US Savings Bond Type	US Savings Bond Issue Date	US Savings Bond Maturity Date
Series E	May 1941 - November 1965	40 yrs. after issue
Series E	December 1965 - June 1980	30 yrs. after issue
Series EE	January 1980 - present	30 yrs. after issue
Savings Notes (Freedom Shares)	May 1967 - October 1970	30 yrs. after issue
Series H	February 1957 - December 1979	30 yrs. after issue
Series HH	January 1980 - present	20 yrs. after issue
Series I Bonds	Present	30 yrs. after issue

You must give the payer of your interest income your correct social security number. If you do not, you may be subject to a tax penalty and to back-up tax withholding. For more information see "What is Form W-9 and backup tax withholding?"

You should receive Form 1099-INT for interest income and an Form 1099-OID for original issue discount from any paying institutions. You may receive a similar or substitute tax statement from each payer. Payers of interest of $10 or more are required to furnish you and the IRS with this tax information. This tax information is also usually included on your year-end account statement. Even if you do not receive a tax statement or Form 1099 you are still responsible for reporting all taxable interest income on your tax return. The IRS is notified of all interest paid by financial institutions on magnetic media. If you do not include your interest income on your tax return the IRS will know when their computer system matches your tax return to the tax information provided by payers. You will then be notified, usually by mail, of the amount of additional tax, interest, and penalties that you owe.

Interest of $1,500 or Less
If your taxable interest income is $1,500 or less, you need to show that taxable income on Line 8a of Form 1040 or Form 1040A, or Line 2 of Form 1040EZ.

Interest of More Than $1,500
If your taxable interest income is more than $1,500 you must file Form 1040 or Form 1040A. You cannot file Form 1040EZ. Start by showing your interest income on Form 1040, Schedule B, or on Schedule 1 of Form 1040A. FolIow the instructions and this will carry over the information to Line 8a of Form 1040 or Form 1040A.

Related tax information about US Savings Bonds

Tax Directory Topics:
US Savings Bond Tuition Plans
Income Related Questions and Answers

IRS publications about US Savings Bonds:
For additional tax information about US Savings Bonds refer to IRS Publication 550,

Investment Income and Expenses. 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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