Which of the following statements regarding the taxation of U.S. savings bonds is correct?

A. If savings bonds proceeds are used to pay for qualifying higher education expenses, such as college tuition and fees, the interest is only taxed by the state government and not the federal government.

B. Interest on I bonds and EE bonds is not taxed by the federal government.

C. Interest on I bonds is not taxable but interest on EE bonds is taxable.

D. Interest on I bonds and EE bonds is taxed by the federal government when the bonds are redeemed.