I noticed a thread on bogleheads specific to NY which may be helpful - https://www.bogleheads.org/forum/viewtopic.php?t=425494#:~:text=Treasuries%20are%20clearly%20obligat...
The gist of one of the main arguments in that discussion is that AMD is exempt from NY state tax bc NY follows Fed definitions and Fed treats AMD as interest income. Unfortunately for NC, the courts ruled explicitly on this topic that AMD is taxable at state level, because NC has a narrower definition of interest income.
Absent a court decision either way like NC, I don't think you'll get a definitive and accountable answer here that should drive you down the unhappy path of paying NY tax on this income, if you need that you will need to consult directly with a local CPA. I'd suggest trying Fidelity again but ask your financial adviser or regional brokerage consultant for fixed income (not the service center), they may be able to refer you to some local CPAs for this. How much to worry about this depends how big the subtraction is and your overall audit risk.
Personally - I was comfortable subtracting it for VA (which is a manual subtraction in TT State) for 2023, and had taken the similar approach of buying low coupon notes, tho I have since avoided low coupon notes where possible, just to minimize this adjustment going forward.
