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Q: What do I do if I need to change information printed on a bond?

The U.S. Treasury Department is hesitant to reissue every savings bond request. Because of the millions of bonds issued and the cost of reissuing them, your reissue request may be denied. When in doubt, contact the Bureau of the Public Debt before you put in a claim. If you do put in a claim, be certain to keep a copy of the documents submitted.

 

Reasons why a savings bond WILL be reissued

A severely misspelled name is a reason to have a bond reissued!

 

Reasons why a savings bond will NOT (normally) be reissued

 

	Changing your last name due to marriage or divorce. Helpful Hint: Present your social security card or drivers license to the bank for proof of your maiden name. Check with your bank of their identification requirements prior to cashing in the bond.
	An address change. Helpful Hint: Only H or HH bonds require notification of an address change who are receiving interest payments which are sent directly to a specified address. E, EE or I bonds and even HH bonds with direct deposit features do not require an address change. Notice: August 31st, 2004 was the last issue date for HH/H Bonds. After August 31, 2004, the government discontinued the exchange of bonds for HH/H bonds. Current holders of HH/H Bonds will not need to do anything different than they normally would have.
	Social Security Errors. Helpful Hint: Many bonds that were given as gifts often have erroneous information on them. When you redeem the bond, the agent or bank will ask for proper identification and the correct number will be used at that time. You can notify the Bureau of Public Debt so that they have a record of the correct number in case the bonds are lost or stolen. TIP: When a child receives a bond as a gift, you do not need to know their ss#. Banks will use the purchasers ss#. (This is not a potential tax liability for the purchaser unless their name is on the bond) If you have the child’s ss#, use it! It would be a good idea to include the child’s ss# on the purchase form in case the bond is ever lost or stolen.

Q. How do I make my bonds tax free for Education?

 

    According to a Treasury Department survey, 40% of current bond purchases are earmarked for education purposes. With that in mind, read the useful information below to determine if you qualify for the tax free bond exclusion.

 

Here's How It Works
    The Education Savings Bond Program allows taxpayers to exclude from their gross income all or a portion of the interest earned on eligible series EE savings bonds purchased since January 1, 1990, and/or the interest earned from the new series I bonds.
   
    To qualify for this exclusion, tuition and other educational expenses have to be incurred by the taxpayer, the taxpayer's spouse or the taxpayer's dependent at certain post-secondary educational institutions.

 

Qualifications / Exclusions
    1. Bonds must be issued in the taxpayers name, not the child's name for the tax free exclusion benefit.

    2. An educational expense includes tuition and fees at certain post-secondary institutions and vocation schools.

    3. HH bonds are NOT eligible for the program.

    4. Only Series EE purchased as of January 1, 1990 and all Series I bonds qualify.

    5. Both the principal and interest from bonds redeemed during the year MUST be used for qualified educational expenses to exclude the bond interest from gross income.

    6. Income limitations are as follows: married couples, filing jointly with incomes up to and including $78,350.00, (modified adjusted gross income) and single filers for incomes up to $52, 250.00 (modified adjusted gross income).

 

Purchasing Education Bonds:
    1. The program utilizes EE bonds, or I bonds. There is no special education series bond.

    2. Bonds can be purchased over the counter at more than 40,000 financial institutions.

    3. Bonds issued December 31, 1989 and prior WILL NOT generate excludable interest.

    4. The purchaser must be at least 24 years old before the bonds issue date.

    5. Participants enrolled in the payroll savings plan should review their
        companies registration form.

    6. There is no limitation to the denominations of bonds purchased (from $50-$10,000).
    7. There is an annual purchase limit of up to $30,000 face value
         of EE bonds (purchase price of $15,000) and $30,000 of I bonds.
         You may purchase the limit of both in the same year.

 

Redemption Procedures

There are no special changes to the redemption procedures for bond holders or paying agents.

    1. The bond owner must maintain a record of the excludable gross income tax in the year that the bonds are redeemed and eligible expenses are incurred.

    2. If the redemption proceeds of all of the eligible bonds redeemed during the year exceeds the amount of the qualified expenses paid for that year, the amount of interest will be reduced by a pro rate amount.

The IRS will furnish the necessary forms and instructions for use in connection with income tax returns. We also have these forms in our database, which you can download now!

Q: How do you exchange E, EE bonds for HH bonds?

Notice: August 31st, 2004 was the last issue date for HH/H Bonds. After August 31, 2004, the government discontinued the exchange of bonds for HH/H bonds. Current holders of HH/H Bonds will not need to do anything different than they normally would have.

 

A: You can convert (or exchange) E, EE, Savings Notes (and even H bonds, see below) to HH bonds any time they are after 6 months old or within one year after the bond reaches it’s final maturity. ONCE A BOND IS REDEEMED (CASHED IN) IT CANNOT BE EXCHANGED FOR AN HH BOND. You can only exchange your bonds for HH bonds, you cannot purchase HH bonds with cash.

 

What Are The Benefits Of Exchanging to an HH Bond?

The primary reason to exchange E, EE bonds or Savings Notes for HH bonds is to defer taxes on the interest earned by the original bond. By converting to HH Bonds, you can continue to defer taxes (for up to an additional 20 years) on the interest that your E, EE or Savings Notes has earned (for up to 30 or 40 years) or whenever you exchange the bond.

For example, if your EE bond has reached it’s final maturity (in 30 years), you can either cash in the EE bond and pay the taxes on the interest earned, or you have up to twelve months from the final maturity date to convert it to an HH bond. You will not have to report the taxes on the interest earned on the EE bond at the time of exchange.

Another advantage to convert to HH bonds is to also receive interest payments on the HH bonds. Series HH bonds are also referred to as "current income bonds". These bonds will produce taxable interest payments deposited directly into your bank account every six months. The current rate is 4% (guaranteed for the first 10 years). You cannot defer taxes on the interest earned on the HH bonds.

 

When Will I Have to Pay the Taxes on the Original Bond?

When you exchange your original bonds (E, EE or Savings Notes) to HH bonds, the amount of the interest that you deferred is printed on the HH bond. The HH bond is worth it’s face value. When you redeem your HH bonds (or when they reach their final maturity in 20 years), the interest that you deferred becomes taxable at that time.

 

Notice: August 31st, 2004 was the last issue date for HH/H Bonds. After August 31, 2004, the government discontinued the exchange of bonds for HH/H bonds. Current holders of HH/H Bonds will not need to do anything different than they normally would have.

How and Where Do I Exchange To An HH Bond?

You can exchange E, EE or Savings Notes to HH bonds at any financial institution that sells U.S. Savings Bonds. The form that the bank will use is the "Exchange Application" or PDF 3253. You can combine E or EE bonds (Note: The new "I" Series bonds cannot be exchanged for HH bonds) to reach the HH denominations amounts of $500, $1,000.00, $5,000.00 and $10,000.00. If the original bonds that you are exchanging do not equal the denomination of the HH bond, you are permitted to add a small amount of money to purchase the bond. If on the other hand, the total amount of your original bonds exceeds the purchase price of the HH bond, the bank or issuing agent will refund you the difference.

 

Can I Convert My H Bond?

Yes, once the H bond (issued from June 1952 through December 1979) reaches it’s final maturity (in thirty years), you can convert it to an HH bond.