Updated August 3, 2026. Quick answer: the education exclusion is real and most people who assume they qualify do not. The disqualifier is almost always the same one: a bond registered in the child’s name never qualifies, and that is exactly how savings bonds are usually bought for a child.
What it does
“You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U.S. savings bonds during the year if you pay qualified higher education expenses during the same year.”
The conditions, and where they bite
A qualified U.S. savings bond is a Series EE bond issued after 1989 or a Series I bond. The bond must be issued either in your name (sole owner) or in you and your spouse’s names (co-owners). You must be at least 24 years old before the bond’s issue date. For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child.
Three separate traps live in that paragraph:
- The bond must be in the parent’s name, not the child’s. A bond bought for a child and registered to that child is permanently outside this exclusion — for the parent and for the child.
- The age test runs to the issue date, not the purchase date. The issue date assigned to a bond is the first day of the month in which it is purchased – so the owner must have turned 24 before that first-of-month date, not merely before the purchase. Someone who bought a bond a fortnight after turning 24 may find the assigned issue date precedes their birthday.
- Filing status. You do not qualify for this exclusion if your filing status is married filing separately.
The income limits
For taxable years beginning in 2025 the exclusion begins to phase out above modified AGI of $149,250 for joint returns and $99,500 for all other returns, and is completely phased out at $179,250 joint and $114,500 other.
For taxable years beginning in 2026 the exclusion begins to phase out above modified AGI of $152,650 for joint returns and $101,800 for all other returns, and is completely phased out at $182,650 joint and $116,800 other.
Where these come from. The 2026 figures are from Rev. Proc. 2025-32 § 4.17, read directly. We previously said no 2026 number was available because Publication 550 for 2026 had not been issued — that was looking in the wrong place. The annual inflation adjustments are published in the revenue procedure, not in Publication 550, and they were available all along.
Note also that the exclusion is claimed in the year of redemption against expenses paid in that same year, so the income tested is the income of the year you cash the bonds. For a household near the phase-out, the timing of a redemption is the variable.
The 529 route, which does work
“Qualified expenses include any contribution you make to a qualified tuition program or to a Coverdell education savings account.”
That is worth knowing because it decouples the redemption year from the tuition year. The contribution to the plan is itself a qualified expense, so the bonds can be cashed in a year that suits the income test and the money used later.
The usual reductions still apply — tax-free scholarships, other tax-free educational assistance, and expenses already claimed for an education credit all reduce the qualifying amount.
How to claim it
Form 8815, Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989.
Before you count on this
Check the registration on the actual bonds first. It is the condition that fails most often, it cannot be fixed retrospectively, and it takes one minute to check. Everything else on this page is downstream of it. And if the exclusion is unavailable, the reporting election is the remaining lever.
General information drawn from IRS, Medicare, HUD and state statute and regulation, not legal, tax or financial advice. Continuing-care law is state law and differs materially between states; every figure here is year-labelled and every source named. Fiduciary licensing, executor compensation and intestacy are STATE law and differ change. Rates and limits are year-labelled and move; verify current terms at treasurydirect.gov before acting. Nothing here is a prediction or a recommendation about any investment – it describes how these instruments work.