Check your California Interest and Dividends Adjustment Worksheet, Line 1. The subtraction for interest from a US obligation may already be showing there.
If not, check your Federal Schedule B, Interest Income Smart Worksheet, Box 3 entry, which would carry the interest over to your CA return as a subtraction.
If you're using TurboTax Online, clear your Cache and Cookies, after verifying your Federal entry is correct.
Here's instructions for California Adjustments.
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