The accrued interest stamped on the front of the bonds was the amount earned on the original savings bonds when they were exchanged for HH bonds. That amount has never had taxes paid on it, so yes, you will need to pay taxes on the accrued interest in the tax year the bonds were redeemed. On the back of the 1099 form you received from the Treasury Dept, there is an explanation for each column on the front of the form.
