The savings bonds need to get entered in the Federal interest income section. The amount will be shown in Box 3-Savings bonds and treasury int. TurboTax will tax this on the Federal return, and then exempt it from taxes on the state return.
When you go through the State questions it may ask about it, but it is exempt from State taxes.
The interest that your savings bonds earn is subject to: federal income tax, but not to state or local income tax. any federal estate, gift, and excise taxes as well as any state estate or inheritance taxes.
