One of the threads mentioned above stated that you cannot fix this in the step by step view. You must go into forms view and make a change. I followed that and Turbotax let me e-file, but it is still pending in the NJ system. (Federal was accepted.) I got confirmation from NJ Division of Taxation that accrued market discount on UST is tax exempt, but it is not true in every state.
TaxAct has a nice screen in their NJ module. It presents what it thinks are NJ taxable and tax exempt interest and allows you to adjust them.
Wish Turbotax had this.
