Treasury/Savings Bonds

Interest that is earned on these savings bonds is taxed to the child, even if the parent paid for the bonds. The interest earned will be taxable to the child when the bond is redeemed unless an election was made to report the income annually. When the bond is redeemed, the child will receive a 1099-INT form at the end of the year. This will tell you the amount of interest to report on your child's tax return. If the interest was reported annually over the years, then you will need to separately identify and subtract the previously reported income on Schedule B of the tax return. Please speak with a local CPA about how to report this and other savings bonds you may not have cashed in yet.