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New Member
posted May 31, 2019 11:48:49 PM

I cashed in series EE savings bonds. Can the interest be written off against my child's college education?

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7 Replies
Expert Alumni
May 31, 2019 11:48:51 PM

Yes, it can. The savings bond education tax exclusion permits qualified taxpayers to exclude from their gross income all or part of the interest paid upon the redemption of eligible Series EE and I Bonds issued after 1989, when the bond owner pays qualified higher education expenses at an eligible institution (your Modified Adjusted Gross income must be less than $146,300 (married filing jointly) or $92,550 (single) and you are not filing as Married Filing Separately).

Please follow below steps for data entry:

  1.  Federal Taxes
  2.  Wages and Income
  3. Interest and Dividends, select Interest on 1099-INT - please be sure to indicate that your form has more info than just box 1 (see pic.) and continue through the interview questions. Once on the Here's what we have so far screen, select Done; at this point TurboTax will ask Did you use your U.S. savings bonds to pay for higher education expenses. Continue through the qualifying questions.

For more information, please refer to Who Can Cash in Bonds Tax Free.

Returning Member
Feb 13, 2020 8:09:23 AM

I am not able to find where I can input anything about using the bonds to pay for tuition. I know it is supposed to ask that question, but it isn't. Is there any way to bypass this?

Expert Alumni
Feb 13, 2020 8:24:21 AM

Follow these steps to get the prompt about EE bonds for tuition:

  1. From Wages & Income (or Income & in Self-Employed) Click Interest on 1099-INT.
  2. Click Add another 1099-INT (or edit if you have entered the data.
  3. Enter the interest in Box 3. This is important to trigger the question.
  4. After all interest statements are entered click Done.
  5. Answer Yes "Did you cash any Series EE or I savings bonds?"  Note: Only interest Series EE or I savings bonds qualify for this exclusion.
  6. Follow the remaining prompts to check to see if your interest meets the remaining qualifications for the exclusion.

@gayle3

Returning Member
Feb 13, 2020 8:35:07 AM

It is not asking these questions. Here is what comes up after I input the interest:

 

 
 

Tell us if any of these uncommon situations apply:

We need to adjust the taxable amount

State income taxes were withheld on this interest

Our state doesn't tax all of the interest

None of these apply

Expert Alumni
Feb 13, 2020 8:44:06 AM

Check none of these apply on this screen. 

 

Then after you are done with all interest and select Done. 

 

It should show after you completely leave the interest section (it doesn't show after each individual 1099-INT). 

 

@gayle3

Returning Member
Feb 13, 2020 9:12:18 AM

Ok, so I got to that window and it asked if I used it for tuition. I said yes. It was issued in my name, so I also clicked on that. Then it said Sorry it looks like you won't get a tax break for your bond interest.

Expert Alumni
Feb 13, 2020 11:49:26 AM

Please review this Turbo Tax link to see if you meet the seven tests required to write these off against your child's qualified college expenses.

 

Note income limits have changed in 2019. The AGI income limits are now $81,100 for single filers and $121,600 for married couples filing jointly.