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Level 1
posted Feb 13, 2023 2:14:35 PM

Nontaxable Interest

What is considered nontaxable interest in regard to figuring "combined" income for SSI?

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3 Replies
Expert Alumni
Feb 13, 2023 2:39:37 PM

SSI considers “income” anything a person receives that can be used for food or shelter. Income includes but isn’t limited to cash, checks, and “gift” items received, such as food and shelter.  Nontaxable interest is interest paid on government obligations (bonds).  Taxable status can vary based on whether it's a federal or state obligation.  For federal tax purposes, interest paid by state and local government and agencies are not taxable.  For SSI, "Interest and dividends earned on other resources, in many cases." according to the SSA.

Level 1
Feb 13, 2023 3:11:15 PM

So does nontaxable include US Savings Bonds? I series.  And is it reported when the interest received?

Expert Alumni
Feb 13, 2023 3:37:20 PM

Yes, US Savings Bond interest is non-taxable, although you do need to report it when it is received.

 

Here's How to Report Savings Bond Interest.