I answered all the questions correctly and entered the interest in Box 3 from 1099-INT. I did not say the interest is not taxable. I did not use the interest to pay for higher education. But TT deducted the amount from my state income. I deleted the entries and re-entered. It did not make a difference. Why would TT deduct interest on US Savings Bonds when I did not say that the interest is not taxable?
