According to the New York State Department of Taxation and Finance, interest income from U.S. Treasury securities is generally exempt from New York State income tax. However, the accrued market discount is not considered interest from the Treasury itself, so it may not be exempt from New York State income.
According to this NYS source interest form US treasury securities is exempt but it doesn't mention accrued market discounts. In researching numerous sources, accrued market discounts are the same as interest income however and under the guidelines given by NYS in the source i mention above, these are also exempt from NYS tax.
@Susanne B
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