Are Series HH Bonds Taxable?

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Yes, interest payments on HH bonds must be reported as interest income.

every year on your federal income tax return This is a non-transferable interest.

Income taxes imposed by the state or local governments. The Treasury Department publishes an interest income statement.

(Form 1099-INT from the Internal Revenue Service)

each year by January 31st, demonstrating the interest you earned the previous year.

You can also owe taxes on deferred interest.

“Is there any tax liability when I cash HH bonds?” is answered below.

What is your tax rate on HH bonds?

Is the interest on HH bonds taxable? The interest you make on your HH bonds is taxable at the federal level, but not at the state or municipal level.

What exactly is a Series HH bond?

  • The Series HH bond was a non-marketable, 20-year government savings bond that paid semi-annual interest depending on a coupon rate.
  • The coupon on the Series HH bond was fixed for the first ten years, after which the US Treasury reset it for the remainder of the bond’s existence.
  • Series HH bonds were issued in denominations of $500, $1,000, $5,000, and $10,000 and were sold at face value.

What happens when HH bonds reach their maturity date?

The bond’s face value was reimbursed to the investor upon maturity. Interest income from Series HH savings bonds must be recorded in the tax year in which it is received, but it is exempt from state and local taxes.

What is the purpose of Series HH savings bonds?

Every six months, HH bonds pay interest. The bond’s value remains unchanged. When you bought the bond, you paid face value, and when you cash it, we pay you face value.

  • To obtain service, dial toll-free 844-284-2676 and speak with a customer service professional. Representatives are available Monday through Friday, 8 a.m. to 6 p.m. Eastern Time, excluding holidays.

Are the bonds in Series HH redeemable?

The face value of an HH bond is equal to its face value. If the bond says $500, it was purchased for $500 and now has a value of $500.

You cannot cash a savings bond that you find in someone else’s possession or that you purchase on an internet auction site. Savings bonds are not transferable, sellable, or tradeable.

See “Death of a Savings Bond Owner” if you inherit a bond through the death of the bond owner.

What is the distinction between an EE and an HH bond?

HH bonds pay current interest every six months at a rate set at the time of purchase. The interest rate resets to the current HH rate on the bond’s tenth anniversary, and the bonds continue to pay for another ten years. Fixed interest rates are also paid on EE bonds issued after May 2005. On May 1 and November 1 of each year, this rate adjusts for new bonds. The bonds earn interest until they reach full maturity, which is 30 years, but you only get it when you redeem them.

Is it still possible to convert Series EE bonds to Series HH bonds?

Owners of Series EE and E bonds will no longer be able to swap them for HH bonds after the close of business on August 31, and owners of matured HH/H bonds will no longer be able to reinvest their holdings in HH bonds.

When I cash in my savings bonds, will I receive a 1099?

On January of the following year, 1099-INTs are posted in TreasuryDirect. Use the ManageDirect page’s URL.

If you cash at a bank, the paperwork is provided. The bank may give you the form right away or mail it to you later, maybe after the year in which you cash the bond has ended.

If you cash with Treasury Retail Securities Services, the form will be mailed to you in January of the following year.

On HH savings bonds, where is the serial number?

If you have any queries regarding any of the fields displayed by the Calculator, here are brief descriptions of the fields.

  • Bond Serial Number–Your paper savings bond’s serial number can be located in the lower right corner. This information is optional, however it is necessary for record-keeping purposes in the event that your paper bonds are lost or destroyed.
  • When you initially use the Savings Bond Calculator, it displays the current value of your paper bonds. You can alter the ‘Value as of’ date to see what they’re worth in various months. From January 1996 through the current rate period, the Calculator can show you how much your paper bonds are worth.
  • The series of your paper savings bond can be located in the upper right corner. This calculator calculates values for the following series of paper savings bonds: EE, I, and E.
  • Denomination–The face value of your paper bond, as seen in the upper left corner.
  • The date your paper bond was issued is known as the issue date. It’s the month and year printed underneath the series on the right side of your paper bond.
  • Total Price–The total amount you spent for this inventory’s paper bonds.
  • Total Interest–The total amount of payable interest accumulated by the paper bonds in this inventory from the date listed in the ‘Value as of’ box to the date listed in the ‘Value as of’ box.
  • Total Value–As of the date in the ‘Value as of’ box, the total cash value of the paper bonds included in this inventory. If you cashed all of these paper bonds in that month, you’d get this.
  • Year-to-Date Interest (YTD Interest) is the term used to describe the interest that has accrued since the beginning of the year. From January of the year mentioned in the ‘Value as of’box to the date given, the total amount of interest accumulated by the paper bonds in this inventory.
  • Interest–The amount of interest that has accrued on each paper bond from the Issue Date to the ‘Value as of’ date.

Note: If you cash a bond issued after May 1997 and it’s less than five years old, you’ll be charged a three-month interest penalty. This penalty is included in the interest indicated here.

  • Value–The current market value of each paper bond as of the date specified in the ‘Value as of’ section.
  • Interest Rate–The rate of interest that each bond is earning at the time the ‘Value as of’ field is entered. This rate is used to compute the interest due on the Next Accrual Date.
  • Next Accrual–The first time a bond’s value increases after the date stated in the ‘Value as of’ box.
  • The current interest rate on a bond is not available.
  • That is to say,

a) The bond’s interest has stopped accruing;

b) Until the next rate period, when fresh interest rates are released, we won’t know what rate the bond earns during the ‘Value as of’ date.

  • You modified the ‘Value as of’ date to a date before the paper bond was issued, resulting in NI. Not Issued.
  • Bonds bearing the notation NE (Not Eligible for Payment) cannot be cashed until they are at least 12 months old.
  • P5–Bonds issued after May 1997 and older than five years have a three-month interest penalty.
  • MA. Matured–This paper bond has reached the end of its life cycle and is no longer earning interest. (For September 2004 and later, use “Value as of” dates.)

What is a savings bond in the I series?

  • A series I bond is an interest-bearing, non-marketable US government savings bond.
  • Series I bonds are considered a low-risk investment because they provide a return plus inflation protection on an investor’s purchasing power.
  • Series I bonds pay a fixed interest rate for the duration of the bond’s existence, as well as a variable inflation rate that is changed every May and November.
  • The initial maturity of these bonds is 20 years, with a 10-year extension period for a total of 30 years.

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