Is interest earned on US savings bonds exempt if used to open 3 individual 529 plans (as the owner) for my grandkids (beneficiaries)? If so, how do I enter into Turbotax?

[Rainman12]

Interest paid to a QTP (such as 529) qualifies for exemption. Look for that option in questions following 1099-INT entry.

[Hal_Al · Accepted solution]

Yes. Savings bonds cashed for education qualify for the interest exclusion. Depositing money into a 529 plan counts as "used for higher education". After entering the 1099-INT (with an amount in box 3), the Turbotax (TT) interview will ask "Did you use the U S Savings Bonds to pay higher education expenses?". Answer yes.

The next screen will verify that your particular bonds qualify. Then you will be asked details about the amounts, your student-beneficiary and the name of the Educational Institution (in your case the 529 plan)

There are AGI limits for doing this. (https://www.treasurydirect.gov/indiv/planning/plan_education.htm)

[BOONIEBOY]

529s are not considered Cloverleaf plans or qualified tuition plans. Turbo tax does not list 529 Plans as option for contributions. How are 529s handled?

[Hal_Al]

A 529 plan is a Qualified tuition plan (QTP). The two terms are synonymous.  A Coverdell Educational savings account (ESA) is some thing different.