How to Fill Out IRS Form 8815 (w/Examples) + FAQs

You fill out IRS Form 8815 to exclude interest from Series EE and Series I U.S. savings bonds from your federal taxable income when you cash those bonds in the same year you pay qualified higher education expenses for yourself, your spouse, or a dependent. The form is short, but the rules behind it are layered, and a single mistake can wipe out the entire exclusion and trigger income tax on every dollar of bond interest.

The Education Savings Bond Program under Internal Revenue Code §135 was created to help middle-income families pay for college without losing the tax-deferred growth on their bonds. According to the Treasury Department’s annual savings bond data, Americans hold more than $180 billion in outstanding savings bonds, yet a 2024 Government Accountability Office report found that millions of bondholders never claim available tax benefits because the paperwork feels intimidating.

Here is what you will learn in this guide:

• 📋 How every line of Form 8815 works, from line 1 through line 14, with the worksheet math behind each entry
• 🎓 Which education expenses qualify and which ones quietly disqualify your exclusion
• 💰 The 2025 modified adjusted gross income (MAGI) phase-out thresholds and how to calculate your reduced exclusion
• 👨‍👩‍👧 Three named real-world examples covering single filers, married couples, and grandparent-funded bonds
• ⚠️ The seven most common mistakes that cause the IRS to deny the exclusion and how to avoid each one

What Form 8815 Actually Does

Form 8815, officially titled Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989, lets qualifying taxpayers exclude part or all of the interest earned on certain U.S. savings bonds from their gross income. The exclusion is authorized by IRC §135, which Congress passed in 1988 as part of the Technical and Miscellaneous Revenue Act. The goal was simple: give working families a tax-favored way to save for a child’s college without forcing them into the more complex rules of 529 plans or Coverdell Education Savings Accounts.

The form is filed with your annual Form 1040 and works in tandem with Schedule B, where you first report the full bond interest as taxable. Form 8815 then calculates the excludable portion and subtracts it from your taxable interest. The consequence of skipping Form 8815 is that 100% of the interest stays on Schedule B and gets taxed at your ordinary rate, which can run as high as 37% under the 2025 federal tax brackets.

A common misconception is that the exclusion happens automatically when you cash a bond at a college’s bursar office. It does not. You must affirmatively claim it by attaching Form 8815 to your return, and you must keep records proving you paid qualified expenses, redeemed the bonds in the same calendar year, and met the MAGI limits. Without the form, the IRS treats the interest as fully taxable, even if every other rule is satisfied.

Who Issues the Bonds and Who Tracks Them

The U.S. Department of the Treasury issues Series EE and Series I bonds through TreasuryDirect, the federal government’s online portal for buying and managing savings bonds. Series EE bonds purchased after 1989 are eligible for the exclusion, while older Series E bonds and Series HH bonds are not. Series I bonds, introduced in 1998, are also eligible because they share the same statutory framework under §135.

When you redeem a bond, the financial institution or TreasuryDirect issues you a Form 1099-INT showing the interest portion of the redemption. That 1099-INT amount feeds directly into line 6 of Form 8815. The consequence of losing or misreading your 1099-INT is that you may understate or overstate the interest, both of which trigger IRS matching notices.

The Statutory Authority Behind the Form

IRC §135(a) provides the exclusion, §135(b) defines qualified higher education expenses, and §135(c) lists the eligibility requirements. Treasury Regulation §1.135-1 provides the detailed mechanics and is the source of most of the worksheet math you see on the form. The IRS interprets these rules through Publication 550 and Publication 970, both of which contain examples that mirror the Form 8815 worksheets.

Eligibility Rules at a Glance

Before you fill out a single line, confirm that you meet every eligibility rule because missing any one of them disqualifies the entire exclusion. The rules apply to the bond owner, the bond itself, the year of redemption, the type of expense, and your income level. The IRS reviews these elements through automated matching and through occasional correspondence audits triggered by Form 8815 filings.

Age and Ownership Rules

The bond owner must have been at least 24 years old before the bond’s issue date, which is printed on the front of paper bonds and shown in your TreasuryDirect account for electronic bonds. The consequence of buying a bond in a child’s name and trying to claim the exclusion later is automatic disqualification, because the child was younger than 24 at issuance. A common misconception is that you can fix this by re-registering the bond into a parent’s name; under 31 CFR §353.49, reissuance does not change the original issue date for §135 purposes.

For example, if grandparents bought a Series I bond in 2010 and titled it in their grandchild’s name when the grandchild was age 6, the bond can never qualify for the §135 exclusion no matter who eventually cashes it. This rule alone causes thousands of denied exclusions every year, according to data summarized in Treasury Inspector General reports.

Filing Status Restrictions

If you are married, you generally must file a joint return to claim the exclusion. IRC §135(d)(3) bars the exclusion for taxpayers using the married filing separately status. The consequence is that a couple who would otherwise qualify but who choose MFS for any reason loses the entire bond interest exclusion that year.

A common misconception is that head of household filers cannot claim the exclusion; they can, as long as they meet the other rules. Single, head of household, qualifying surviving spouse, and married filing jointly are all permitted statuses.

2025 Modified AGI Phase-Outs

The exclusion phases out at higher income levels. For 2025 returns filed in 2026, the IRS inflation adjustments set the phase-out ranges as follows.

Filing Status	Phase-Out Begins	Fully Phased Out
Single, HoH, QSS	$99,500	$114,500
Married Filing Jointly	$149,250	$179,250

If your MAGI falls inside the phase-out range, you receive a partial exclusion. If it exceeds the upper threshold, you receive zero exclusion, and the bond interest is fully taxable on Schedule B.

Qualified Higher Education Expenses

Only certain costs count as qualified higher education expenses (QHEE) under IRC §135(c)(2). The expense must be paid in the same calendar year you redeem the bond, and the school must be an eligible educational institution participating in a federal student aid program under Title IV of the Higher Education Act.

What Counts

Qualified expenses include tuition and required fees at an eligible college, university, or vocational school. They also include contributions to a 529 qualified tuition program or a Coverdell Education Savings Account for the benefit of yourself, your spouse, or a dependent, which is a powerful planning tool because it lets you cash bonds tax-free even before the beneficiary actually enrolls in school.

For example, a parent with a 16-year-old child can cash $10,000 of Series I bonds in 2025, contribute the proceeds to a 529 plan, and treat the entire contribution as a qualified expense for §135 purposes. The 529 plan then grows tax-deferred and pays out tax-free for college years later. This double tax shelter is one of the most underused features of the program.

What Does Not Count

Room and board do not qualify under §135, even though they qualify for the American Opportunity Credit and 529 plan distributions. Books, supplies, and equipment are likewise excluded unless required as part of tuition. Insurance, transportation, medical fees, and student activity fees are all disqualified.

The consequence of including room and board on the Form 8815 worksheet is an overstated exclusion, which the IRS catches through 1098-T matching with the school. A common misconception is that any expense paid to the school qualifies; only tuition and required fees qualify, and the school’s Form 1098-T box 1 amount is the starting point, not the ending point.

Coordination with Other Education Benefits

You cannot double-dip. Any tuition you use to claim the American Opportunity Credit, the Lifetime Learning Credit, a tax-free 529 distribution, or a tax-free Coverdell distribution must be subtracted from your QHEE before you put a number on line 2 of Form 8815. IRC §135(d)(2) requires this anti-duplication adjustment.

For example, if Maria pays $12,000 in tuition for her daughter, claims a $2,500 American Opportunity Credit based on $4,000 of expenses, and takes a $3,000 tax-free 529 distribution, her remaining QHEE for §135 purposes is $12,000 − $4,000 − $3,000 = $5,000. Only $5,000 can support a bond interest exclusion that year.

Line-by-Line Walkthrough of Form 8815

The 2025 version of Form 8815 has 14 numbered lines, plus a name-and-address section listing the student and the institution. Each line builds on the prior line, so a small error early in the form cascades through the rest of the worksheet.

Top of Form: Student and School Information

You list the name of each person, school, or 529/Coverdell account that received the qualified expense in column (a), and the name and address of each eligible institution or qualified program in column (b). The consequence of leaving these columns blank is automatic IRS rejection of the exclusion, because the matching system cannot verify the school. A common misconception is that you only list the student; if you funded a 529 plan, you list the 529 plan administrator and the beneficiary.

For example, James paid tuition directly to State University for his son and also contributed to a Vanguard 529 plan for his daughter. James lists two rows: one for his son with State University’s address, and one for his daughter with the Vanguard 529 plan address. Both are required to support the combined Line 2 figure.

Line 1: Total Qualified Expenses

Line 1 asks for the total qualified higher education expenses you paid in 2025 for the people listed at the top of the form. This number comes from receipts, the school’s Form 1098-T, and 529 contribution confirmations. The consequence of overstating Line 1 is an inflated exclusion that the IRS will reverse upon audit.

A common misconception is that Line 1 includes room and board because the 1098-T sometimes shows those amounts; it does not. Only tuition and required fees, plus 529 and Coverdell contributions, belong on Line 1.

Line 2: Nontaxable Education Benefits

Line 2 subtracts the tax-free education benefits already claimed elsewhere, such as scholarships excluded under IRC §117, employer-provided educational assistance under §127, veterans’ education benefits, the portion of expenses used for the American Opportunity or Lifetime Learning Credit, and tax-free 529 or Coverdell distributions.

The consequence of forgetting Line 2 is double-counting, which the IRS will catch through 1099-Q and 1098-T matching. For example, if Sarah received a $5,000 scholarship and paid $10,000 of tuition, only $5,000 goes on Line 1 minus Line 2, not the full $10,000.

Line 3: Adjusted Qualified Expenses

Line 3 is simply Line 1 minus Line 2 and represents your true §135 qualified expenses. If Line 2 exceeds Line 1, you enter zero, and your exclusion for the year is zero.

Lines 4 and 5: Bond Proceeds Breakdown

Line 4 asks for the total proceeds (principal plus interest) from all post-1989 Series EE and Series I bonds you redeemed in 2025. Line 5 asks for the interest portion only, which you take from your Form 1099-INT box 3.

The consequence of mixing up Line 4 and Line 5 is a wildly wrong ratio later in the form. A common misconception is that you only enter the bonds you used for tuition; you enter all eligible bonds redeemed in the year, even if some proceeds were spent on other things.

Line 6: Excludable Interest Ratio

Line 6 multiplies Line 5 by the ratio of Line 3 to Line 4, capped at 1.0. The formula is ( \text{Line 6} = \text{Line 5} \times \min\left(\frac{\text{Line 3}}{\text{Line 4}}, 1.0\right) ).

This is the core mechanic of the exclusion. If your qualified expenses match or exceed your bond proceeds, the entire interest portion is potentially excludable. If your expenses are less, only a proportional share of interest qualifies.

Lines 7 through 13: MAGI Phase-Out Worksheet

Lines 7 through 13 calculate your modified adjusted gross income and apply the phase-out. Line 7 starts with the AGI from your Form 1040 line 11. Line 8 adds back the bond interest from Line 6, plus deductions for student loan interest, foreign earned income exclusion, and certain other items listed in the Form 8815 instructions.

Line 9 is the phase-out floor ($99,500 single or $149,250 joint for 2025). Line 10 subtracts Line 9 from Line 8. Line 11 is the phase-out range ($15,000 single or $30,000 joint). Line 12 divides Line 10 by Line 11 to get a phase-out fraction. Line 13 multiplies Line 6 by that fraction to compute the lost portion.

Line 14: Final Excludable Amount

Line 14 subtracts Line 13 from Line 6 and represents the actual interest you exclude on your return. You enter this amount as a negative on Schedule B line 3, labeled Excludable interest on series EE and I U.S. savings bonds issued after 1989.

The consequence of skipping Schedule B line 3 even after completing Form 8815 is that the exclusion never reaches your taxable income, because Form 1040 pulls only from Schedule B. A common misconception is that Form 8815 alone reduces your tax; it must be paired with the Schedule B adjustment to actually reduce taxable interest.

Three Named Examples

Real numbers illustrate the math better than abstract rules, so here are three named scenarios that mirror the most common Form 8815 fact patterns.

Example 1: Single Filer Maria, Below Phase-Out

Maria, age 32, is finishing her MBA at an eligible university in 2025. She redeems $8,000 of Series I bonds she bought in 2015, of which $3,000 is interest. She pays $9,500 of tuition and required fees and receives a $1,500 employer tuition reimbursement excluded under IRC §127. Her AGI is $72,000.

Her Line 1 is $9,500, Line 2 is $1,500, Line 3 is $8,000, Line 4 is $8,000, Line 5 is $3,000, and Line 6 is $3,000 because Line 3 equals Line 4. Her MAGI of $72,000 is well below the $99,500 phase-out, so Lines 7 through 13 reduce nothing. Line 14 is $3,000, which she enters as a negative on Schedule B line 3. Maria saves roughly $660 in federal tax at the 22% bracket.

Example 2: Married Couple James and Lisa, Inside Phase-Out

James and Lisa file jointly with two dependents, AGI of $164,250. They redeem $20,000 of Series EE bonds in 2025, $7,000 of which is interest. They pay $25,000 in tuition for their daughter at a state university and use $4,000 of those expenses for the American Opportunity Credit.

Their adjusted QHEE is $25,000 − $4,000 = $21,000 on Line 3. Their bond proceeds on Line 4 are $20,000, so the full $7,000 of interest is potentially excludable on Line 6. Their MAGI of $164,250 sits inside the joint phase-out range of $149,250 to $179,250. The phase-out fraction is ($164,250 − $149,250) ÷ $30,000 = 0.5. Line 13 is $7,000 × 0.5 = $3,500. Line 14 is $7,000 − $3,500 = $3,500. They exclude $3,500, saving roughly $770 in federal tax at the 22% bracket.

Example 3: Grandparent-Funded Bonds Re-Registered for Sarah’s 529

Robert, age 68, owns Series EE bonds he bought in 2005 in his own name when he was 49 years old. In 2025 he redeems $15,000 of those bonds, $6,000 of which is interest, and contributes the entire $15,000 to a 529 plan for his granddaughter Sarah. Robert’s MAGI is $94,000, single.

Because Robert was over 24 at issuance and contributed the proceeds to a qualified 529 plan in the same year, the bonds qualify. His Line 3 and Line 4 both equal $15,000, so Line 6 is the full $6,000 of interest. His MAGI of $94,000 is below the $99,500 single phase-out, so Line 14 is $6,000. Robert excludes $6,000 of interest, saving roughly $1,320 in federal tax at the 22% bracket. The 529 plan then grows tax-free and pays Sarah’s tuition years later, creating a double tax benefit.

Three Common Scenario Tables

Each scenario below maps a real decision point to its tax outcome under §135 and the Form 8815 instructions.

Decision	Tax Outcome
Bond was titled in a child’s name when issued	Exclusion fully denied because owner was under age 24 at issuance
Both spouses earn high incomes and file MFS	Exclusion denied because MFS taxpayers are barred under §135(d)(3)
Bond proceeds exceed qualified expenses by 25%	Only 75% of the interest qualifies, calculated through the Line 6 ratio

Expense Type	§135 Treatment
Tuition and required fees paid to eligible school	Qualifies as QHEE on Line 1
Room, board, books, and transportation	Does not qualify and must be excluded from Line 1
Contribution to a 529 plan or Coverdell ESA	Qualifies as QHEE even before the beneficiary enrolls

Income Position	Exclusion Result
MAGI below the phase-out floor	Full interest excluded if all other rules met
MAGI inside the phase-out range	Partial exclusion calculated on Lines 9 through 13
MAGI above the phase-out ceiling	Zero exclusion and full interest taxed on Schedule B

Mistakes to Avoid

Each mistake below comes from real IRS denial patterns documented in Tax Court memorandum decisions and Publication 550 examples.

• Putting the bond in the child’s name. The owner must have been at least 24 at issuance, so child-titled bonds never qualify, costing families the entire interest exclusion.
• Forgetting to redeem in the same year as the tuition payment. The redemption and the qualified expense must occur in the same calendar year, or the §135 timing rule disqualifies the exclusion.
• Including room and board on Line 1. Only tuition and required fees count, so adding dorm and meal plan costs inflates Line 1 and triggers correction notices.
• Double-counting expenses used for the American Opportunity Credit. Anti-duplication rules under §135(d)(2) require those expenses to be subtracted on Line 2 first.
• Filing married filing separately. MFS filers cannot claim the exclusion at all, and switching to MFS for one year wipes out the entire benefit.
• Ignoring the MAGI add-back on Line 8. The phase-out uses MAGI, not AGI, and missing the add-back understates income and risks IRS recalculation.
• Skipping Schedule B line 3 after completing Form 8815. The exclusion only reduces taxable income when entered as a negative on Schedule B, so the form alone does nothing.

Do’s and Don’ts

The list below is shaped by the Form 8815 instructions and the Treasury regulations.

• Do keep your Form 1099-INT and bond serial numbers for at least three years, because the IRS may request proof of issue date and ownership.
• Do match every dollar on Line 1 to a tuition receipt or 529 contribution confirmation, because documentation prevents denial under §6001.
• Do consider rolling bond proceeds directly into a 529 plan, because that strategy locks in the §135 exclusion while preserving future tax-free growth.
• Do redeem bonds early in the year you expect tuition payments, because year-end redemptions risk timing mismatches if checks clear in January.
• Do confirm the school is on the Department of Education’s eligible institutions list, because non-Title IV schools disqualify the entire exclusion.
• Don’t title bonds in a minor’s name if you ever expect to use them for §135, because that single act permanently disqualifies the bonds.
• Don’t claim the exclusion if your filing status is married filing separately, because §135(d)(3) blocks MFS taxpayers entirely.
• Don’t ignore phase-out planning, because shifting income to the next year through retirement contributions can preserve thousands of dollars of exclusion.
• Don’t forget to attach Form 8815 to your return, because e-filed returns without the form trigger automatic adjustment notices.
• Don’t pay tuition with bond proceeds and also take a tax-free 529 distribution for the same dollars, because the IRS treats it as duplicated benefits.

Pros and Cons of Using the §135 Exclusion

Understanding both sides helps you decide whether to commit to bond-funded education savings or pivot to a different vehicle.

• Pro: Federal interest exclusion produces real tax savings, often $500 to $1,500 per family per year, because the interest never enters taxable income.
• Pro: Series I bonds offer inflation protection through the composite rate, which has paid above 4% in recent semiannual resets.
• Pro: Bond proceeds can fund a 529 plan, which doubles the tax shelter through later tax-free 529 distributions.
• Pro: No state income tax on savings bond interest in any state, because federal preemption under 31 U.S.C. §3124 protects savings bonds from state taxation.
• Pro: Simple paperwork compared to 529 plans, because Form 8815 is a single page with 14 lines.
• Con: MAGI phase-outs eliminate the exclusion for higher-income families, leaving the interest fully taxable.
• Con: $10,000 annual purchase limit per Social Security number on electronic Series I bonds at TreasuryDirect, which limits scale for affluent families.
• Con: Bonds must be held at least 12 months, and redeeming within five years forfeits three months of interest under Treasury rules.
• Con: Interest rates on Series EE bonds may lag inflation when fixed rates are low, hurting long-term real returns.
• Con: Coordination with other credits is complex and easy to miscalculate, which can trigger IRS correspondence audits.

Key People, Places, and Entities

Several institutions, statutes, and forms work together to make the §135 exclusion function. The U.S. Department of the Treasury issues the bonds. TreasuryDirect is the online platform where electronic Series EE and Series I bonds are bought, held, and redeemed. The Internal Revenue Service administers Form 8815 and audits exclusions through its document matching program.

Eligible educational institutions are colleges, universities, and vocational schools that participate in Title IV student aid programs under the Higher Education Act. State 529 plan administrators and Coverdell ESA custodians serve as alternative recipients of qualified contributions. IRC §135 is the core statute, while Treasury Regulation §1.135-1 supplies the operational rules.

Process and Forms Summary

The §135 exclusion process involves four federal forms, each playing a distinct role. Skipping any one of them breaks the chain of documentation the IRS expects.

• Form 1099-INT reports the bond interest from your bank or TreasuryDirect.
• Form 1098-T reports tuition paid to the eligible institution.
• Form 8815 calculates the excludable interest.
• Schedule B (Form 1040) applies the exclusion as a negative adjustment to taxable interest.

Recap of Key Court Rulings and Guidance

While Form 8815 disputes rarely reach published opinions, several decisions and IRS rulings shape how examiners view the exclusion. In Karlen v. Commissioner, T.C. Memo 2011-129, the Tax Court denied a §135 exclusion because the bond owner was under 24 at issuance, confirming that age-at-issuance is a strict bright-line rule.

In Hudson v. Commissioner, T.C. Summary Opinion 2013-30, the court denied the exclusion because the taxpayer redeemed bonds in December but did not pay tuition until January of the following year, illustrating the same-year timing requirement. IRS Publication 550 and Publication 970 both provide worksheet examples that the agency treats as authoritative for examination purposes.

Frequently Asked Questions

Can I claim Form 8815 if I file married filing separately?

No. IRC §135(d)(3) bars married taxpayers filing separately from claiming the exclusion. You must file jointly, single, head of household, or qualifying surviving spouse to qualify.

Do Series EE bonds bought before 1990 qualify?

No. Only Series EE and Series I bonds issued after December 31, 1989, qualify under IRC §135. Older Series E and HH bonds are ineligible regardless of how the proceeds are used.

Can I exclude interest if I cash bonds and contribute to a 529 plan?

Yes. Contributions to a qualified 529 plan for yourself, your spouse, or a dependent count as qualified higher education expenses on Line 1 of Form 8815, even before the beneficiary enrolls.

Does room and board count as a qualified expense?

No. Only tuition and required fees count as qualified expenses under §135(c)(2). Room, board, books, transportation, and personal expenses are excluded from Line 1.

Can my child’s bond, titled in their name, qualify when they pay tuition?

No. The bond owner must have been at least 24 years old before the bond’s issue date. A child-titled bond fails this rule permanently and cannot be rehabilitated by reissuance.

What happens if my MAGI exceeds the upper phase-out threshold?

No exclusion is allowed. For 2025, single filers above $114,500 MAGI and joint filers above $179,250 MAGI receive zero exclusion, and the full bond interest is taxable on Schedule B.

Do I need to attach Form 8815 to my paper return?

Yes. The form must be attached to Form 1040 for paper filers. E-filers transmit the form data through their software, which the IRS matches against Schedule B.

Can grandparents claim the exclusion for grandchildren?

Yes, but only if the grandchild is the grandparent’s tax dependent or the proceeds fund a 529 or Coverdell account for the grandchild. Otherwise the relationship test under §135(c)(2)(A) fails.

Does the exclusion apply at the state tax level?

Yes, savings bond interest is exempt from state and local income tax under 31 U.S.C. §3124, regardless of whether the §135 federal exclusion applies.

Can I amend a prior return to claim a missed Form 8815 exclusion?

Yes. File Form 1040-X within three years of the original due date to claim a missed exclusion, attaching a corrected Form 8815 and Schedule B.

Is the exclusion subject to the 3.8% net investment income tax?

No exclusion from NIIT applies, but excluded §135 interest does not enter your investment income for NIIT purposes because it is not included in gross income at all.

Can I use bond proceeds for graduate school tuition?

Yes. Graduate-level tuition at an eligible educational institution qualifies just like undergraduate tuition under §135, as long as all other rules are met.