Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Income

Interest Income

U.S. Savings Bonds

Series EE and Series I

The most common type of U.S. savings bonds are Series EE bonds. They are issued at a discount, and the interest is the difference between the purchase price and the amount received when the bonds are redeemed (cashed in).

Series I bonds, first offered in 1998, are issued at face value with a maturity period of 30 years. As with Series EE bonds, the interest is paid when the bonds are redeemed.

Taxpayers can report interest income from a Series EE or Series I savings bond either:

  • When the bond matures or is redeemed (whichever occurs first), or
  • Each year as its value increases

However, taxpayers must generally use the same method for all the Series EE and Series I bonds they own.

More Information

If the taxpayers cashed in Series EE or Series I bonds, they should have Form 1099-INT from the bank. Most taxpayers report the total interest when they cash the bonds. Some taxpayers may report savings bond interest as it accrues. This method is out of scope for the volunteer program and taxpayers should be referred to a professional tax preparer.

Tip

A Net Investment Income Tax applies to individuals, estates and trusts that have certain investment income above certain threshold amounts. This topic is out of scope for the VITA/TCE programs and taxpayers should be referred to a professional tax preparer. Additional information can be found on www.irs.gov.

U.S. Savings Bonds, Series EE and Series I.