How do I remove US Treasury income from my state return?

Question

My 1099-B shows column 1f Accrued Market Discount. This amount is associated with US Treasury issues.  It shows as taxable interest on 1040 Schedule B.  It also shows as taxable income on my state return.  How do I remove this income from my state return?

wup.a · Answer

FT does not show an entry to deduct interest from US Treasury issues in the state return section.  The instructions from the state do show an entry line to deduct interest from US Treasury issues.  The state instructions do not mention accrued market discount.

I expected FT to show an entry in the federal return section to note the amount from US Treasuries.

DaveT · Answer

https://community.freetaxusa.com/discussion/2416/how-do-i-remove-us-treasury-income-from-my-state-return

Many states treat Accrued Market Discounts as gains rather than direct Treasury interest. You may be able to manually adjust the subtraction if your state return allows it.