Series EE bonds can grow tax deferred and the interest
is reported when the bond is redeemed.
When you cash in the bonds, you will have to report the gain on your income tax. The basis for the bonds is the original cash basis as paid by your mother - that is, one half of the face value. This is required because the bonds have grown with interest tax-deferred, When you cash the bonds you will report as interest income the full difference between the original purchase price (paid by your mother) and what you get when you redeem them.
You may want to consider cashing some in each of two tax years
(some before December 31 and some on or after January 31 to spread the tax burden
over two years.
There is an exception to my answer if your mother (or the executor of her estate had elected to report the accrued interest on her income taxes
but that is highly unlikely and not usually done.
The Treasury Direct Web page "Death of a Savings Bond Owner" has to say on the topic:
"Upon death of one of two people named in a bond's registration, any surviving person named on bonds as co-owner or beneficiary
becomes the new owner. As the new owner, this person is required to include, on their tax return
, the interest earned on the bonds for the year the bonds are redeemed or disposed of in a taxable transaction
or the bonds reach final maturity, whichever occurs first.
Also, whoever files the deceased person's final, individual
, federal income
tax return for the year that person died has the option of reporting
all interest earned on the bonds up to the date of death."
for the full article.
I hope this helps to know you do report the interest in the year the bonds are redeemed unless the interest has already been reported.