US Savings Bond interest

[jackcito2000]

The interest on US Savings Bonds is excluded from taxable income if it used for higher education expenses. What if the university is outside the USA?

[LarryL20]

Per IRS Publication 970, the US Savings Bonds must used at an eligible education institution.  The IRS defines an eligible education institution as any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions.  You should be aware that certain educational institutions located outside the United States also participate in the U.S. Department of Education's Federal Student Aid (FSA) programs.  Therefore, the educational institution does NOT have to be located in the United Stated but must participate in the Federal Student Aid programs.  The educational institution should be able to tell you if it is an eligible educational institution.  In Chapter 9 of IRS Publication 970,  you should also be aware that there are Modified Adjusted Gross Income limits for excluding the interest from your income.

[mikafeed58]

The Key Language in regard to your question is that the interest from these bonds is tax free if used for "Qualified" Higher Education Purposes. What needs to be determined is whether or not the Institution is an "Eligible Education Institution."

The IRS defines Eligible Education Institution as such: An eligible educational institution is a school offering higher education beyond high school. It is any college, university, trade school, or other post secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education.

This can include foreign educational institutions as long as they are eligible to participate in FSA programs. Please see the link below for further information:

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eligible-educational-ins...