Thanks for your detailed response.
Unfortunately, the Accrued Market Discount on US Treasuries is not on a Form 1099-INT where I can mark the interest as non-taxable in NJ. It is on Form 1099-B. And no ability in TurboTax to mark income on 1099-B as non-taxable for NJ even though the NJ tax forms clearly mark that as non-taxable income (see below) --
From NJ-1040 instructions --
Examples of Exempt (Nontaxable) Income Do not include the following income when determining if you must file a return. These items should not appear anywhere on your form except for tax-exempt interest, which you report on line 16b.
...
Interest and capital gains from (1) obligations of the State of New Jersey or any of its political subdivisions; or (2) direct federal obligations exempt under law, such as U.S. Savings Bonds and Treasury Bills, Notes, and Bonds
