Exclusion of Income from U.S. Savings Bonds for Taxpayers Who Pay Qualified Higher Education Expense
Taxpayers who pay qualified higher education expenses in the tax year 2019 and redeemed any qualified United States savings bonds (Series EE bonds issued after 1989 and Series I bonds) were exempt from including that amount in income if their MAGI fell within specific ranges. The phaseout began for Married Filing Jointly filers with MAGI above $121,600, and all other filers above $81,100. The exclusion was completely phased out for Married Filing Jointly taxpayers with MAGI of $151,600 and all other filers with MAGI of $96,100.
The taxpayer cannot file Married Filing Separately, and the owner of the bond must be at least 24 years of age at the time bond was issued. The expenses must have been to pay tuition and fees or to make contributions to a Coverdell ESA* or a QTP. The expenses must have been paid to an eligible educational institution such as a college, university, vocational school, or post-secondary education school for the taxpayer, spouse, or dependent.
*A Coverdell ESA is a trust or custodial account created or organized in the United States only for the purpose of paying the qualified education expenses of the designated beneficiary of the account.