I have this issue. Fidelity issued me a 1099 int with 4k of interest. 1k are from agency bonds not taxable by state. if i click on my state doesn't tax all of this interest, 100% of the interest gets deducted from the NJ return. It seems to be an all or nothing option. Turbotax was not helpful. Suggested it was a fidelity issue. I'm concerned about changing information on the 1099 so turbotax will correctly calculate it (seems to work if i deduct the agency bond interest in the amount of interest in box 1 and then add the agency interest to box 3 (int on treasury obligations). That's how vanguard handled it.
