Q: Is the purchase discount on a U.S. Treasury note or bill reportable for federal income-tax purposes? If so, how?

A: The interest on a T bill is reportable as income on your federal income-tax return but is exempt from state or local income tax. However, although the amounts of the purchase discount and the interest amounts generally are the same, the discount itself is not reportable.

The refund of the discount amount from the Treasury Department represents the difference between the face amount you are required to deposit with a purchase request and the bid price at which the bonds were auctioned on the day of the sale.

As a refund of a part of your purchase payment, this amount is not taxable income. At maturity, you will receive the full face amount; at that time, the difference between that face amount and the net amount you paid for the bill or note is interest income.

Many people look upon the discount refund as their interest payment. However, the true situation -- that is, the receipt of the interest at maturity -- has two interesting side effects. Here is an opportunity to delay income from one year to the next, because you can buy, say, a 90-day T bill in November, receive the discount refund at that time and not be liable for income tax until the bill matures in February of the following year.

And the true interest rate is somewhat larger than the discount rate cited at the time of the auction. For example, if you buy a 12-month $10,000 bill at a discount of 8 percent, you will get a discount refund of $800, thus paying in effect $9,200 for the bill. The $800 interest should be figured on that cost rather than on the $10,000 you deposited initially. So your true interest on the bill is almost 8.7 percent -- not the 8 percent quoted as the discount at the time of sale.

Notes and bonds are not bought in this manner. Like the bills, the interest on Treasury notes and bonds is subject to federal income tax but exempt from state or local tax. But they are bought at face value and carry a fixed rate of interest, which is subject to tax on receipt.

T bills are sold with three-, six- or 12-month maturities; notes are sold with maturities ranging from at least one year to seven years. Treasury bonds carry maturities of five years or longer. But only the bills are sold at auction and have the two peculiarities mentioned above.

Q: In your Dec. 16 column on Social Security, you said: "Starting with the year in which you reach your 70th birthday, there is no limit on the amount of money you can earn. . . . " A representative from the Social Security Administration tells me that is not correct, and should read: "After you reach your 70th birthday, there is no limit. . . . " Who is right?

A: The Social Security representative is right, and I was wrong -- the result of a little careless writing. Instead of "Starting with the year," I should have said: "Starting with the month in which you reach your 70th birthday. . . . "

Incidentally, the rule is different at the age-65 level for determining the earnings ceiling before loss of benefits. If a beneficiary reaches age 65 at any time before the end of a tax year, then the higher over-65 ceiling applies for the entire year.

Because of a personal experience, a reader suggests I remind you that you may miss a tax deduction on interest charges on one or more of your credit cards. Normally, the amount of interest charged on the account for the preceding year is shown on the December or January statement -- sometimes on both. But in his case he had canceled a charge account with a major department store during the year. As a result, he no longer was receiving monthly statements, so he didn't get the information.

Some credit-card issuers will provide an annual interest statement to all accounts that had been open at any time during the year -- but others may not. So be sure you know what interest you had paid; if you didn't get a confirming end-of-year statement from any of your creditors, call or write and ask for it. And on Schedule A, claim all the interest you paid even if the statement doesn't arrive.