Without a diagnostic file to better understand your particular situation it is difficult to say why your savings bond interest is not being excluded from your income. I have tested the scenario you described and the program is working as expected and the savings bond interest is being excluded from income.
There are a couple of items that may be a factor in the result you are seeing. First, there is a Modified AGI limit to consider when excluding savings bond interest. If your MAGI falls within a certain range, then you may only be able to partially exclude the savings bond interest, or you may not be able to exclude any at all.
Second, after you have entered the qualified education expense (your 529 contribution), there will be another screen asking about the savings bonds that were cashed. The first box asks for the total proceeds from cashing the bonds. Then, the next three boxes ask for the face value of the bonds that were cashed. There are three boxes, each for a particular type of bond. If these boxes are not completely accurate, then the exclusion calculation will not be accurate either. These numbers are used to determine the amount of the exclusion. If the face value of the bonds is set to zero or left blank, then there will not be any exclusion allowed.
@jbstav17
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