It is interest. Did you get a 1099INT from the bank or Treasury? If you have an actual Treasury Direct account, where your savings bonds are stored electronically. You need to log into that account and get your 1099-INT as a PDF download form within the account. They do not mail out paper 1099-INT forms.
Yes you need to report the interest you got. Enter Savings Bond interest like if you got a 1099-Int for it under
Federal Taxes tab (Personal for H&B)
Wages & Income
Interest and Dividends
Interest on 1099INT - Click the Start or Update button
Savings Bond interest goes in box 3 not box 1. So it won't be taxed on the state return.
