US savings bonds are sold in two different series (Series EE and Series I), and both are only sold electronically at face value of the bond. (Series EE bonds were previously sold in a paper bond at 1/2 of their face value.) Each of these bonds has a 30-year maturity period.
The savings bond owner has two options for recognizing interest income from the bond:
- The cash method reports the interest income annually by determining the increased redemption value of the bond
- The accrual method postpones reporting the interest income until the year the bond is cashed, transferred, or reaches maturity
For instructions on how to report the savings bond income in the year the owner dies, select their reporting option.
If you’re the beneficiary of a savings bond where a portion of the accrued interest was previously reported as income on either the decedent’s final personal income tax return (1040) or on the estate income tax return (1041), you can enter an adjustment to the savings bond interest reported on the 1099-INT to reflect only your taxable portion. Here's how: