In general, you must report the interest in income in the taxable year in which you redeemed the bonds to the extent you did not include the interest in income in a prior taxable year.
- If your total taxable interest for the year is more than $1500, you must complete Schedule B (Form 1040A or 1040), Interest and Ordinary Dividends, Part 1, and attach it to your Form 1040 or Form 1040A, U.S. Individual Income Tax Return.
- If your total interest isn't more than $1500 for the year, and you are not otherwise required to report interest income on Schedule B, report the savings bond interest with your other interest on the "Interest" line of your tax return. For more information, see Schedule B (Form 1040A or Form 1040).
Exception: Some or all of the interest may be excludable from your gross income if you pay qualified higher education expenses for yourself, your spouse, or your dependent (for whom you claim an exemption) during the year.