Q. It appears likely now that redeeming $62K of EE bonds has pushed us over the interest exclusion limits for the form 8815 so that we get no exclusion. Is that right?
A. Yes. The $47,208 excluded interest is added back to your AGI to calculate the Modified Adjusted Gross Income (MAGI) that determines your eligibility. The calculations will be shown on form 8815.
I label this a "gotcha" they didn't emphasize when they sold us (yes, they got me too) savings bonds for future education 20 years ago.
