Can H-1B holders exclude savings bond interest for education?

Yes, if the bond was issued after 1989, the owner was 24+ when issued, and the proceeds are used for qualified higher education expenses. However, the exclusion phases out at MAGI $100,800 (single) / $158,650 (MFJ), which many H-1B holders exceed.

What qualifies as education expenses for Form 8815?

Tuition and required fees at an eligible educational institution for you, your spouse, or your dependent. Room and board, books, and supplies do not qualify.

Form 8815: Exclusion of Interest from Series EE and I Savings Bonds

If you redeemed Series EE or I savings bonds and used the proceeds for qualified higher education expenses, you may exclude the interest from your income using Form 8815. This guide explains the income limits, qualifying expenses, and how the exclusion works for H-1B visa holders.

What Is Form 8815?

Form 8815, "Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989," allows you to exclude from gross income the interest earned on U.S. savings bonds when you redeem them and use the proceeds to pay for qualified higher education expenses for yourself, your spouse, or your dependents.

This is an income exclusion, not a credit — the interest simply is not included in your taxable income. The exclusion reduces the amount reported on Schedule B.

Eligibility Requirements

Bond type: Series EE or Series I savings bonds issued after 1989.
Owner age: The bond owner must have been at least 24 years old when the bond was issued.
Filing status: Cannot file as Married Filing Separately.
Income limit: The exclusion phases out at higher income levels. For TY2025, the phase-out begins at MAGI of $100,800 (single) or $158,650 (MFJ) and is fully eliminated at $131,050 (single) or $188,650 (MFJ).
Qualified expenses: Tuition and required fees at an eligible educational institution (not room and board). Must be for the bond owner, spouse, or dependent.

H-1B consideration

This form is relevant if you purchased I-bonds or EE-bonds (popular as safe investments) and later redeemed them to pay for graduate school tuition for yourself or your spouse. However, many H-1B holders in tech exceed the income phase-out threshold, which limits or eliminates the exclusion.

How the Exclusion Is Calculated

Determine total proceeds from redeemed bonds (principal + interest).
Determine qualified higher education expenses for the year.
If expenses are less than total proceeds, only a proportionate share of the interest is excludable: (expenses / proceeds) x interest = excludable interest.
Apply the income phase-out reduction if your MAGI exceeds the threshold.
The excludable amount is subtracted from the bond interest reported on Schedule B.

Key Lines on Form 8815

Line 1: Total bond proceeds redeemed during the year.
Line 2: Interest portion of the proceeds.
Line 3: Qualified education expenses.
Lines 4-9: Proportionate exclusion calculation.
Lines 10-13: Income phase-out reduction.
Line 14: Excludable savings bond interest — reported on Schedule B.

Related Resources

Frequently Asked Questions

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H1B TaxFile Team

Written by the H1B TaxFile editorial team — tax professionals and software engineers who specialize in U.S. federal tax filing for H-1B visa holders, F-1 students, and nonresident aliens.

Reviewed by a licensed CPA with international tax experience.

Disclaimer: This guide is for educational purposes only and does not constitute tax or legal advice. Tax laws are complex and change frequently. Consult a qualified tax professional for advice specific to your situation.