Maturing Series EE Bonds taxes

Regarding your article on maturing 30 year Series EE Bonds, you indicated that Federal Income Tax must be paid at maturity even if you don’t cash the bonds in. My banker said this may be a misprint as he never heard of this requirement. Can you please provide any additional information to me on this subject and indicate how the United States Treasury Department monitors and enforces this provision of the law.

Terry Says:  It’s not a misprint!  The taxes are due in the year the bonds reach maturity. The government is not out scouting for un-cashed savings bonds!  But when you eventually do cash them in, you could be liable for a penalty for not reporting income in the year in which it should have been put on your return!