In 2016, Hank and Mckayla purchased Series EE bonds, and in 2020 redeemed the bonds, receiving $300 of interest and $3,300 of principal. Their income from other sources totaled $34,000. They paid $3,800 in tuition and fees for their dependent daughter. Their daughter is a qualified student at State University. (The proceeds from the Series EE bonds were used to pay the tuition and fees.) (Click the icon to view the exclusion phaseout information.) Read the requirements. Requirement a. How much of the Series EE bond interest is excludable? The amount of interest that is excludable is Requirement b. Assuming that the daughter received a $2,900 scholarship, how much of the interest is excludable? Ignore any tax credits that might be available. Under this scenario, the amount of interest that is excludable is Requirement c. Assuming the daughter received the $2,900 scholarship and that the parents' income from other sources is $129,250, how much of the interest is excludable? Under this scenario, the amount of interest that is excludable is Exclusion phaseouts: Phaseout occurs when the combined amount of principal and interest received during the year exceeds the net qualified educational expenses and the taxpayer's modified adjusted gross income is over $82,350 ($123,550 for married individuals filing a joint return). The exclusion is fully phased-out for taxpayers whose 2020 modified AGI is more than $97,350 ($153,550 for married individuals filing a joint return)