US Savings Bonds, 529 plans, and Education Savings Account

Can US Savings Bonds be cashed in tax-free for contribution to a qualified state tuition program (529 plan) or Education Savings Account?

Yes.

If the owner of the US savings bond meets the requirements, he/she may redeem and deposit the proceeds into a 529 plan or an Education Savings Accounts (ESA) tax-free, subject to the normal contribution rules for these programs.

Unless the IRS provides further guidance, the redemption and deposit transactions should occur within the same calendar year to avoid reporting difficulties.

The owner is required to file Form 8815 to exclude the US Savings bond interest from taxation.