savings bond taxes

Why Do I Need To Report Interest Earnings On Older Savings Bonds That I Still Own?

savings bonds

When U.S. Savings Bonds reach their final maturity, the IRS requires that you report the interest earned on your Federal Income Tax Return, even if the bond was not cashed in. Surprising, right?

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There are billions of dollars worth of savings bonds that have reached final maturity and are no longer earning any interest. Chances are if you are sitting on older paper bonds, you might own some and you should be reporting the interest income.

According to the Treasury Department’s website, the interest earned on savings bonds should be reported on your Federal Income Tax Return in the year it is either cashed-in, or you give up ownership of the bond and it is reissued, or the bond reaches final maturity, whichever occurs first.

Learn final maturity dates and total interest earned amounts using the complimentary SavingsBonds.com calculator.

What Taxes Will I Owe?

  • Interest earnings should be reported as regular income on a Federal Income Tax Return.
  • Savings Bonds are not subject to state or local taxes.
  • Most series E, EE and I Savings Bonds will reach final maturity in 30 years from the issue date.
  • All series E bonds have matured and are no longer earning any interest.
  • Paper bonds are not automatically redeemed at final maturity.
  • When redeeming paper bonds, a 1099-INT will be either issued on the spot or mailed to you.
  • Matured electronic bonds are automatically redeemed and the interest is reported to the IRS.
  • Electronic bond owners need to print out their own 1099-INT from their Treasury Direct account.

Holding onto matured bonds is essentially giving the government an interest free loan.


Jackie Brahney, Savings Bond Expert

To properly manage bonds and track maturity dates and interest earned amounts, subscribe to SavingsBonds.com’s intuitive Bond Management Service. Their signature monthly emailed Savings Bond Statements provide maturity alerts up to 3 month in advance, along with the total interest earned amounts for easier tax reporting, along with other helpful bond reports, tools and services.

Important: When bonds are redeemed, all of the interest earned will be reported on a 1099-INT for that year, regardless of interest that may have been previously reported. The IRS does not keep track of annual interest reporting amounts.

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How Do I Avoid Double Taxation?

  • If reporting interest earned amounts annually, keep copies of all applicable Federal Income Tax Returns.  
  • In the year you redeem the bonds, indicating the amount of interest already reported & include copies of the prior tax returns.
  • Advise appropriate heirs and beneficiaries about the annual interest reporting.

SavingsBonds.com Tip:  Reporting savings bond interest annually can be a smart financial move and help avoid paying excess taxes, especially if you have a lot of interest income that will be have to be reported. If choosing the annual reporting method, keep a copy of all applicable tax returns (indicating all reported interest amounts) with the actual savings bonds.

Those good old-fashioned paper savings bonds, often stashed away for savings, education or rainy day expenses, should be pulled out, dusted off and reviewed and managed with an affordable online bond service. If any bonds reached final maturity years ago, consider consulting a tax or financial professional regarding filing amended tax returns to avoid any potential IRS penalties and fines in case of an audit.

About SavingsBonds.com: SavingsBonds.com is an online financial bond management company providing essential U.S. Savings Bond information since 1992. For over 26 years, bond experts have created various consumer programs, tools and services not offered elsewhere, including an online complimentary savings bond calculator, providing cash in values with important financial information presented on a personalized, color-coded Savings Bond Inventory Report. Unique savings bond management services include signature monthly summary emailed Savings Bond Statements, which help bond owners maximize their investment, avoid losing money and paying unnecessary taxes.

Last Updated: February 21, 2019

About the author

Jackie Brahney is the Marketing and Editorial Director and most notably, an U.S. Savings Bond Expert for SavingsBonds.com. Since 1991, she has done extensive research on savings bonds and state of the art savings bond valuation systems, and heads the company's public relations and marketing initiatives.

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