How do I report a HH bond?
The regular interest that your HH bonds earn every six months must be reported on your federal income tax return for the year in which the interest is earned. By January 31 of each year, we send the bond owner an IRS Form 1099-INT form showing the interest earned in the previous year.
What happens when a bond owner dies?
The bond is part of the estate of the person who died last. The surviving person becomes the owner as if the survivor had been the only owner from the time the bond was issued. For the tax implications of this situation, see “Who pays taxes and when” further down this page.
Is interest from HH bonds taxable?
Yes, you must report your interest payments on HH bonds as interest income on your federal income tax return each year. This interest isn’t subject to state or local income taxes.
How much interest do HH bonds earn?
HH bonds earn interest for up to 20 years, so you may have HH bonds that are still earning interest….How much interest is that?
| If your bond is for | At this interest rate | Your payment every six months is |
|---|---|---|
| $1,000 | ||
| 1.5% | $7.50 | |
| $5,000 | ||
| 1.5% | $37.50 |
How does deferred interest work on a HH bond?
An HH bond’s face value may include deferred (postponed) interest from an earlier bond. If the HH bond carries deferred interest, you will receive that interest as part of its face value when you cash it. For information on any tax consequences of deferred interest see “Tax Considerations for Series HH Bonds .”
Can a HH bond be transferred after death?
Additionally, if you jointly purchased an HH bond, you can transfer the bond to your sole ownership upon the death of the other owner. Locate your bond and review the issue date that appears on its face. You cannot change ownership of your bond if the bond no longer pays interest or if you are within a few months of the bond’s maturity date.
When do you stop earning interest on a HH bond?
You don’t have to report deferred interest on your federal income tax return until you are filing your return for the year in which the first of these events occurs: You cash the HH bond. The HH bond stops earning interest (this happens 20 years after issue).
How often do you have to report interest on HH bonds?
The interest that your HH bonds earn every six months is subject to federal income tax, but not to state or local income tax. When must I report the interest on my federal income tax return?
