Use Form 8815 to Exclude Interest From Series I and EE US Savings Bonds

What is Form 8815?

If you redeemed Series EE or Series I U.S. savings bonds to pay for higher education expenses, use Form 8815 to exclude the interest from your income.

You can claim this exclusion if you paid qualified higher education expenses for yourself, your spouse, or your dependents in the year you redeemed the savings bond(s). In addition, your modified adjusted gross income (MAGI) must be under a preset amount that changes each year based on inflation. In 2023, it is $106,850 for most filing statuses, $167,800 for married filing jointly, and married filing separately cannot claim the exclusion.

Eligible Series EE and I Bonds

The savings bonds must be Series EE or I, and must have been issued after 1989. The bonds also must be issued in the taxpayer's name, or, if married, both spouses' names.

The taxpayer must have been at least 24 years old when the bond was issued. If a parent buys a bond and it is issued in their under-24 child’s name, Form 8815 cannot be filed for that bond, because neither the parent nor the child can claim the exclusion.

The parents can purchase the bond in their name(s), assuming they are 24 or older, and use the funds for their dependent child’s education. As long as these and other rules are met, the interest earned on the bonds could be tax-free.

Combining interest exclusion with other educational benefits and aid

• On Line 1 of Form 8815, list the student's name and the name and address of the educational institution. If the student attended multiple institutions in the same tax year, list all institutions. If you run out of room on the form, attach an additional statement.
• On Line 1, Column (b), enter "Coverdell ESA" for contributions to Coverdell ESAs for the student named in Column (a), along with the name and address of the financial institution managing the account. Contributions to a qualified tuition plan are treated similarly but notated as "QTP." Even if you didn’t take any distributions, but made contributions, you need to report this on Form 8815.
• On Line 2, enter qualified educational expenses, such as tuition, fees, and books. You will also enter education savings account (ESA) and QTP contributions on this line.
• On Line 3, you must report certain types of aid and tax-free educational benefits, because they will reduce the amount of interest that you can exclude. Those benefits include:

1. Scholarships and fellowship grants excluded from taxable income
2. Employer-sponsored education assistance not reported in Box 1 of Form W-2
3. Veterans' educational assistance benefits
4. Payments and reimbursements from QTPs

Essentially, most tax-free payments for educational expenses, except for gifts, bequests, inheritances, and educational benefits paid directly to or by the institution, reduce the excludable interest and do not need to be included on Lines 2 or 3. Such benefits would include financial aid programs offered by the institution or programs that directly pay the institution, as opposed to first requiring payment to the taxpayer, spouse, or dependent.

How much interest can be excluded?

If the aid and distributions from QTPs exceed your qualified education expenses, you can’t exclude the interest from your income, and you must report the interest on Schedule B or as a line-item write-in on Form 1040. If the aid and distributions don't exceed your qualified educational expenses, report the total proceeds of the bonds you redeemed in the tax year on Line 5.

On Line 6, enter the interest. This is typically reported on Form 1099-INT, but if you reported any interest before the tax year in question, you must fill out a worksheet in Form 8815's instructions to determine the excludable portion.

If Line 4 (higher education expenses less educational benefits and QTP distributions) is equal to or greater than the total proceeds you received, you can exclude more interest based on the formula provided on Form 8815.

Confused? We can help. A Jackson Hewitt Tax Pro can explain this form and help you fill it out, with any supporting documentation or calculations you may need. Taxes can be complicated, but you are not on your own. Contact us today.

About the Author

Mark Steber is Senior Vice President and Chief Tax Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.

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