State tax filing

'Title 26—Internal Revenue Code
Subtitle A—Income Taxes
CHAPTER 1—NORMAL TAXES AND SURTAXES

Subchapter P—Capital Gains and Losses
PART V—SPECIAL RULES FOR BONDS AND OTHER DEBT INSTRUMENTS
Subpart A—Original Issue Discount'
https://uscode.house.gov/browse/prelim@title26/subtitleA/chapter1/subchapterP/part5/subpartA

Click on 'View" to the right of 'Sec. 1273. Determination of amount of original issue discount':
§1273. Determination of amount of original issue discount
(a) General rule

...

(1) In general

The term "original issue discount" means the excess (if any) of-

(A) the stated redemption price at maturity, over
(B) the issue price

...
(3) ¼ of 1 percent de minimis rule
If the original issue discount determined under paragraph (1) is less than-
(A) ¼ of 1 percent of the stated redemption price at maturity, multiplied by
(B) the number of complete years to maturity,
then the original issue discount shall be treated as zero'

Schwab quotes this as:

'If the discount is less than 0.25% of the bond's face value times the number of years to maturity, the discount is taxed as a capital gain in the year the bond matures.'

https://www.schwab.com/learn/story/when-should-you-pay-taxes-on-discount-bonds