Illustrated Example(p62)

The information is the same as in the Example, earlier, for Mark and Joan Washington, except they have a modified adjusted gross income of $118,900. In this example, they can exclude $1,510 of interest in 2011. See line 14 of Form 8815, Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989, later.

They must pay tax on the remaining $1,490 interest ($3,000 total interest – $1,510 excluded interest).