US Government Bonds; Treasury Notes, Treasury Bonds, Series EE Bonds and Series I Bonds
US Government Bonds are Tax Free at the State level. While you may choose to report the interest every year, most people defer reporting the interest until the year in which they receive what the bond is worth, including the interest. This functionality is not currently available in PlannerPlus. We recommend you use the workaround below to account for the interest deferral in this type of account.
First, we need to set up the account.
STEP 1: Head over to MyPlan > Accounts and Assets
STEP 2: ➕ Add the account as a Checking/Savings/Investment account
STEP 3: Give the account a descriptive name, "I Bonds" for example
STEP 4: Select Ordinary Income as your tax treatment
STEP 5: Set your rates of return to 0%
STEP 6: Exclude the account from your withdrawal strategy
Next we need to bring the interest income in.
STEP 7: Head over to MyPlan > Income > Pensions
STEP 8: When asked “what type of pension is this?” select Lump Sum
STEP 9: Enter a descriptive name for the income, eg: "I Bond Interest”
STEP 10: Enter the dividend or interest income received at the bond’s maturity date
STEP 11: Select the maturity date as the payment age
STEP 12: Select the "I Bond" account as the deposit account
STEP 13: Select “Federal Only” when asked if the income is taxable