topic Is EE/I Bond Interest used for Qualified Higher Education Expenses included in MAGI for Form 8962? in Deductions & credits

Is EE/I Bond Interest used for Qualified Higher Education Expenses included in MAGI for Form 8962?

Harold500 — Wed, 10 Mar 2021 18:41:08 GMT

Assuming the tax payer's income is below the limit for EE/I Bonds and the interest is exempted from AGI due to being used for Qualified Higher Education Expenses.....does the interest get added into MAGI? According to Form 8962 and the Data Source for the form, it does not. This is extremely important for accuracy as this could decrease an ACA Tax Subsidy . Thank you for your reply.

Re: Is EE/I Bond Interest used for Qualified Higher Education Expenses included in MAGI for Form ...

AmyC — Wed, 10 Mar 2021 23:44:12 GMT

You used the word decrease. The law regarding the tax subsidy and ACA changed today. I recommend you wait for the IRS to update the program (2-3 weeks) and TurboTax to update after the IRS (??) before you file your return as the entire amount may be eliminated.

Re: Is EE/I Bond Interest used for Qualified Higher Education Expenses included in MAGI for Form ...

Harold500 — Fri, 12 Mar 2021 13:25:25 GMT

Yes, I used decreased when it could be the tax subsidy is decreased or eliminated depending on what your MAGI turns out to be.

Can you elaborate on "as the entire amount may be eliminated"? What specifically changed in the law regarding ACA and tax subsidy (or please point me to a location I can read up on it)?

Are you saying EE/I Bond Interest may be eliminated from the MAGI regardless of condition? What were the rules prior (I've scoured the IRS documents and don't see specific information covering EE/I Bond Interest & MAGI when the bond interest is used for Qualified Higher Education Expenses)?

Again, thank you.

Re: Is EE/I Bond Interest used for Qualified Higher Education Expenses included in MAGI for Form ...

Harold500 — Sat, 13 Mar 2021 14:15:54 GMT

Yes, I used decreased when it could be the tax subsidy is decreased or eliminated depending on what your MAGI turns out to be.

Can you elaborate on "as the entire amount may be eliminated"? What specifically changed in the law regarding ACA and tax subsidy (or please point me to a location I can read up on it)?

Again, thank you.

Re: Is EE/I Bond Interest used for Qualified Higher Education Expenses included in MAGI for Form ...

DaveF1006 — Wed, 17 Mar 2021 21:20:32 GMT

According to this Turbo Tax link written by AmyC, "The law regarding the tax subsidy and ACA changed March 10. She recommends you wait for the IRS to update the program (2-3 weeks) and TurboTax to update after the IRS before you file your return as the entire amount may be eliminated. in the meantime, please read this publication from the US Treasury Dept. regarding USING SAVINGS BONDS FOR EDUCATION. This includes EE/I bond interest discussion. it does have useful information regarding the interest exclusion.

According to this article, some interest may be excluded depending on the upper limit of your filing status. What Amy and everyone suggests is that the entire amount of interest may be excluded from MAGI with the IRS update.