Gift EE bonds
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EE series savings bonds can be purchased for a multitude of reasons. They can be bought as gifts, used as a savings plan for children, bought for educational purposes or just used to round out a financial portfolio. This form of gift is great for weddings, graduations, birthdays or even a thank you for a job well done. Remember that the bond can not be redeemed for the first year and will have a 3 month interest penalty if redeemed before holding the bond for 5 years.
Paper EE bonds
You can give paper EE series bonds as gifts for any occasion. You can purchase the paper bond at a financial institution without the need to have personal identification information of the recipient. The bond can be registered in the name of the person you wish to give it to with your Social Security number (masked since August 2006). For some the paper bond makes the gift more tangible than an electronic bond.
Electronic EE bonds
You can give electronic EE bonds purchased via the web as gifts. Your gift bond will be place in you TreasuryDirect account “Gift Box”. After you have obtained the recipients TreasuryDirect account number the gift will be ready for transfer. The recipient of the gift will receive an email from TreasuryDirect announcing the bond transfer. This is a great gift for any occasion and the gift shopping can be done 24/7 at home in your bathrobe or anywhere else you prefer to access the web.
Social security number
With the prevalence of identity theft it is not a simple matter to get another person’s social security number. You may not even want to know someone else’s social security number. You also may be concerned with your own social security number security. None of these need stop you from purchasing EE bonds as gifts. You don’t need to know the social security number of the person that you are buying the bond for. Your social security number can be used as the bond purchaser. The Social Security number is only for record finding purposes in the event a paper bond is no longer available for any reason. Paper bonds issued after August 1, 2006 have masked Social Security numbers to prevent identity theft and preserve privacy.
EE Bond Tax liability
Taxes are the responsibility of the bond owner. Even if you use an EE bond as a gift and use your personal Social Security number you will not be liable for taxes. When the bond is redeemed the person redeeming it must provide their Employer Identification number or Social Security number to cash in the bond. At this time the gift recipient will be given or mailed a 1099-NT and the IRS notified of the interest income. All tax liability remains with the gift recipient.
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