Savings bond earnings are exempt from all state and local income taxes.
Savings bond earnings are exempt from all state and local income taxes. Increases in value monthly and compound semiannually. Securities TIPS and Zero Coupon Bonds including STRIPS. Consumer Price Index for All Urban Consumers CPI-U.
Savings bonds are exempt from state and local income tax. Department makes a one-time adjustment to bring it to face value. They are an accrual-type security, which means interest is added to the bond monthly and paid when you cash in the bond. Interest earnings are exempt from State and local income taxes, but are subject to Federal, State, and local estate, inheritance, gift, and other excise taxes. Publication 970 Tax Benefits for Higher Education. Interest is also exempt from state and local taxes. Interest earnings are subject to Federal income tax.