If you cash Series EE or I bonds, then pay qualified higher education expenses in the same year, you may be able to exclude some or all of the interest on Form 8815.
Key Takeaways
- You use Form 8815 to exclude interest from post‑1989 Series EE or I bonds when you redeem them and pay qualified tuition and required fees in the same tax year.
- Bonds must be titled to you, you and your spouse, or your spouse. The owner must have been at least 24 years old before the bond was issued. Bonds in a child’s name never qualify.
- Eligible costs are limited to tuition and required fees at an eligible educational institution, and you cannot double count expenses already used for credits or tax‑free aid. Room and board do not qualify.
- Filing status and income matter. Married filing separately is not eligible. The exclusion phases out by modified AGI, which is recalculated each year by the IRS. See the 2024 and 2025 ranges below.
- Keep tight records, including Form 1099‑INT, tuition statements such as 1098‑T, and receipts. Form 8818 is an optional log for each redemption.
What Form 8815 Is And Why You Use It
Form 8815 is how you compute and claim the education savings bond interest exclusion. When you redeem eligible Series EE or I bonds issued after 1989, and you pay qualified higher education expenses in that same calendar year, Form 8815 tells you how much of the reported interest you may exclude from income. You attach the completed form to your federal return and reflect the exclusion on Schedule B.
Who Can Claim The Exclusion
You can claim it for qualified expenses you pay for yourself, your spouse, or a dependent you list on your return. The owner rules are strict. The bonds must be registered to you, you and your spouse as co‑owners, or to your spouse. The bond owner must have been at least age 24 before the issue month. If the bond is in a child’s name, the exclusion is off the table, even if you use the proceeds for that child’s tuition.
What Counts As Qualified Expenses
Qualified expenses are limited to tuition and required fees charged by an eligible educational institution. Charges for room and board, insurance, transportation, and most books or supplies are not qualified for this exclusion. You also cannot double count dollars already used for the American Opportunity Credit or Lifetime Learning Credit or covered by tax‑free scholarships or 529 plan earnings.
2024 vs 2025 Income Limits And Filing Status
The exclusion is reduced or eliminated as your modified adjusted gross income rises. The IRS updates these limits annually. For 2024, the ranges are spelled out in Publication 970. For 2025, reputable summaries reflect the IRS inflation adjustment and show higher thresholds. Always check the instructions for your filing year before you file.
| Year | Filing Status | Phase‑out starts | Fully phased out at |
| 2024 | Married filing jointly | 145,200 | 175,200 |
| 2024 | All other eligible filers | 96,800 | 111,800 |
| 2025 | Married filing jointly | 149,250 | 179,250 |
| 2025 | All other eligible filers | 99,500 | 114,500 |
- 2024 figures are from IRS Publication 970, Chapter 9, Education Savings Bond Program.
- 2025 figures are reflected in independent summaries of IRS inflation adjustments. Verify against your year’s Form 8815 instructions before filing.
Note, married filing separately does not qualify for the exclusion.
What MAGI Means Here
For this benefit, MAGI starts with your AGI, then adds back specific exclusions and deductions described in the Form 8815 instructions and Publication 970. Use the worksheet in the Form 8815 instructions to compute the version of MAGI that applies to this exclusion.
Eligibility Rules, Ownership, And Timing, In Plain English
If you remember only three things about Form 8815, make them ownership, timing, and income. Miss any one of those, and the exclusion falls apart.
Ownership Must Be Right From Day One
- The bond owner must have been at least 24 years old before the month the bond was issued.
- Bonds must be registered to you, you and your spouse together, or your spouse.
- Bonds titled to a child do not qualify, even if every dollar went to that child’s tuition.
- If you file a joint return and co‑own the bonds, either spouse may claim the exclusion on Form 8815, but the claimant must match the ownership shown on the bonds.
Quick check, right now: pull a bond, look at the registration line, and confirm the name matches the taxpayer who will file Form 8815.
Timing, The Same‑Year Rule
You must redeem the bonds and pay qualified tuition and required fees in the same calendar year. If you cashed bonds in December and paid spring tuition the next January, that timing mismatch blocks the exclusion for the December redemption. Plan payments so proceeds and qualified costs hit the same year.
What Counts As Qualified Expenses
- Qualified: tuition and required fees paid to an eligible institution for you, your spouse, or your dependent.
- Not qualified: room and board, transportation, insurance, optional fees, or most books and equipment.
- Coordination: do not double count. If you used the same dollars for the American Opportunity Credit, the Lifetime Learning Credit, a tax‑free scholarship, or tax‑free 529 plan earnings, remove those amounts from your qualified expenses for Form 8815.
Simple Qualified vs Not‑Qualified Reference
| Category | Example | Counts for 8815? |
| Tuition | Bursar tuition line item for fall term | Yes |
| Required fees | Mandatory tech fee, student services fee | Yes |
| Room and board | Dorm housing, meal plan | No |
| Books | Bookstore purchase, syllabus materials | Usually No |
| Travel | Flights, commuting, parking | No |
| Insurance | Student health plan | No |
| Double‑used expenses | Amounts already covered by AOC/LLC, scholarships, or tax‑free 529 earnings | No |
How The Exclusion Is Calculated
Form 8815 does two things. First, it allocates your bond interest between qualified uses and everything else. Second, it applies your year’s MAGI phase‑out to that preliminary exclusion.
The Pro‑Rata Interest Formula
If only part of your redemption went to qualified expenses, you exclude the corresponding part of the interest.
- Step 1, determine the share used for qualified expenses: Qualified expenses paid in the year, after subtracting tax‑free aid, divided by total redemption proceeds.
- Step 2, apply that share to the interest portion. Excludable interest equals total interest times the share from Step 1.
Worked Example, Straightforward Case
- You redeemed bonds for total proceeds of 12,000, of which 3,000 is interest and 9,000 is principal.
- You paid 10,000 of qualified tuition and required fees in that same year. No scholarships or credits were used.
Share used for qualified expenses = 10,000 ÷ 12,000 = 0.8333. Excludable interest = 3,000 × 0.8333 = 2,500. Taxable interest remaining = 500, unless the MAGI phase‑out trims the 2,500 further.
Worked Example, With Scholarships And Partial Use
- Total proceeds 12,000, interest 3,000, principal 9,000.
- Tuition and required fees billed 12,500.
- Student received a 3,500 tax‑free scholarship.
Qualified expenses for 8815 = 12,500 minus 3,500 = 9,000. Share for qualified expenses = 9,000 ÷ 12,000 = 0.75. Excludable interest before MAGI = 3,000 × 0.75 = 2,250. The remaining 750 of interest is taxable.
Pro tip, from experience: the number most often mis‑keyed is the scholarship reduction. Always subtract tax‑free aid before you compute the pro‑rata share.
Avoiding The Most Common Mistakes
Mis‑timed Redemptions
Cashing in December and paying spring tuition in January is the classic miss. If your school lets you prepay in December for the spring term, do it if you plan to redeem bonds in the current year.
Ownership Mismatch
If the bond is in your child’s name, stop here. The exclusion will not apply, even if you claim that child as a dependent and pay tuition.
Double Benefits
You cannot count the same expense twice. If you used 6,000 of tuition for the American Opportunity Credit, remove that 6,000 from the pool for Form 8815.
MAGI Calculation Errors
Form 8815 uses a specific definition of MAGI. Work from the instructions, not a generic MAGI number from another part of your return. The wrong add‑backs can cost you part of the exclusion.
I keep a short checklist on my desk for 8815 cases: ownership, age at issue, same‑year rule, scholarship reduction, credit coordination, MAGI worksheet. Five minutes of checking saves an hour of cleanup later.
Step‑By‑Step, From Paper To Filed Return
Pull Your Records First
You will move faster if you gather everything before you open your software.
- For each bond or redemption batch, note serial number, issue date, total proceeds, and the interest portion. Your 1099‑INT or bank redemption statement will help.
- For the student, collect the billing statement and receipts showing tuition and required fees actually paid in the year. The 1098‑T is helpful, but do not rely on it alone, since it may show amounts billed rather than paid.
- List any tax‑free scholarships, grants, employer assistance, or 529 plan distributions used for that same tuition.
- Confirm your filing status and compute MAGI using the year’s Form 8815 instructions.
A Simple Record Template You Can Use
| Bond serial | Issue date | Owner name(s) | Proceeds | Interest | Used for tuition? | Notes |
| EE‑123456 | 05/2004 | Alex and Sam | 6,400 | 1,800 | Yes | Fall tuition paid 08/20 |
| I‑789012 | 10/2002 | Alex | 5,600 | 1,200 | Yes | Spring tuition paid 12/15 |
Keep a matching expense log for tuition and required fees, with dates and amounts paid. Tie those to the payment confirmations from the school portal or bank.
Entering In Tax Software, Software‑Agnostic Flow
- Go to interest income and enter the 1099‑INT details for the redemption year.
- Launch the education savings bond interest exclusion or Form 8815 workflow.
- Enter the student, school name and address, total qualified expenses paid in the year, and tax‑free aid used.
- Input bond details or total redemption figures, depending on the software’s prompts.
- Complete the MAGI worksheet for the year.
- Review the resulting Form 8815 and Schedule B to confirm the excluded interest is shown correctly.
If you use professional suites like ProConnect, CCH Axcess, UltraTax, Drake, or Lacerte, the interview titles vary, but the path is the same. Start with the 1099‑INT, then open the Form 8815 section, then complete the MAGI worksheet.
Coordinating With Credits And 529 Plans
You can combine strategies, but you must track dollars carefully.
With The American Opportunity Or Lifetime Learning Credit
- Prioritize the AOC first, since it can be more valuable, then allocate the remaining tuition to Form 8815.
- Keep a simple allocation worksheet that shows which tuition dollars went to which benefit. This avoids double counting.
With 529 Plan Distributions
- If you used tax‑free 529 earnings for the same tuition, reduce your qualified expenses for 8815 by those amounts.
- If you used 529 money for room and board, that does not affect Form 8815, since room and board is not qualified for this exclusion anyway.
Example, Partial Phase‑Out Due To MAGI
Say your Form 8815 computation shows 2,500 of excludable interest before the income limits. Your MAGI falls partway into the phase‑out range for your filing status and year. The instructions provide a fraction that reduces your exclusion based on how far into the range you are. If the fraction trims 20 percent, your allowed exclusion becomes 2,000, and 500 of interest remains taxable. Always use the exact worksheet for your filing year.
When in doubt, run the worksheet twice, print both, and keep the version you use with your records. It makes future year comparisons painless and audit‑ready.
Records To Keep, And For How Long
- Keep Forms 1099‑INT, redemption statements, tuition receipts, and payment confirmations.
- Retain the allocation worksheet showing how you removed scholarships, credits, or 529 earnings from the qualified pool.
- Keep a copy of the MAGI worksheet used for the year.
- Save everything for at least three years after you file, and longer if your state requires it.
FAQs, Fast Answers
What is Form 8815 used for?
It is used to claim the education savings bond interest exclusion when you redeem post‑1989 Series EE or I bonds and pay qualified tuition and required fees in the same year. You compute the excludable interest and attach the form to your return.
Do room and board count as qualified expenses?
No. For Form 8815, qualified expenses are limited to tuition and required fees at an eligible educational institution. Housing, meals, insurance, and transportation do not qualify.
Can I use bonds in my child’s name?
No. Bonds must be registered to you, you and your spouse, or your spouse, and the owner must have been at least 24 years old before the month of issue. Child‑titled bonds are not eligible for the exclusion.
What if my MAGI is above the range?
The exclusion phases out by MAGI. If you are above the top of the range for your filing status and year, you cannot claim the exclusion for that year.
Can I claim Form 8815 and the American Opportunity Credit?
Yes, but you cannot use the same expense dollars for both. Allocate tuition first to the most valuable credit, then apply the remainder to the bond interest exclusion.
Do I need the 1098‑T?
It helps, but you should rely on proof of amounts paid, not just billed. Keep receipts, portal confirmations, or bank records that show actual payment dates and amounts.
Practical Checklists
60‑Second Pre‑File Review
- Owner age at issue is 24 or older
- Bond registration matches taxpayer or spouses
- Redemption date and tuition payment dates land in the same calendar year
- Tuition reduced by tax‑free scholarships, grants, and 529 earnings
- AOC or LLC allocations documented to avoid double counting
- MAGI computed with the year’s instructions
- Form 8815 numbers agree with Schedule B
Documentation Packet For Your Files
- Copy of each 1099‑INT and redemption statement
- Tuition and required fee receipts with dates paid
- 1098‑T, if available, plus school name and address
- Allocation worksheet for scholarships, credits, and 529 coordination
- Completed MAGI worksheet and a printed Form 8815
Small But Mighty Tips From The Trenches
- Pay the school directly from the same account you deposit redemption proceeds into. This clean trail helps if questions come up.
- If the school posts fees late in the year, ask about prepayment options so you can align redemption and payment dates.
- Consider redeeming only what you need for the year’s qualified expenses. This can reduce the taxable share of interest.
- If you are close to the top of the MAGI range, consider timing other income or deductions that legally reduce MAGI for that year’s computation.
I have seen parents miss the exclusion because they redeemed the entire bond portfolio in one year, then paid a multi‑term tuition plan across two years. Cash only what this year’s tuition requires, and you keep more interest out of tax.
A Brief Note For Accounting Firms
If you lead a firm, you know Form 8815 cases spike at awkward times, often when teams are buried in production. Keep a light SOP with a one‑page flow, a standard allocation worksheet, and a document request list that your admins can send on day one. If you want disciplined offshore help so your reviewers are not stuck fixing timing and ownership issues, Accountably supports firms with structured teams that work in your systems, templates, and review process.
Compliance Note
This article is for general education. It is not tax advice. Tax rules change, and thresholds are updated annually. Always verify the current year’s Form 8815 instructions and Publication 970 before filing, apply the MAGI ranges for your filing year, and keep detailed records that match the numbers on your return.
Wrap‑Up
You now have the playbook for using Form 8815 the right way, from ownership and timing to pro‑rata math and MAGI. Match redemption and payments to the same year, remove scholarships and credits from the expense pool, run the worksheet carefully, and keep a clean paper trail. Do that, and you will turn bond interest into real savings for school, with confidence and without surprises.