That's right, PR bond interest is not taxable by the states. The TT/States won't include it in taxable if they know it's PR bond interest and that has to be entered in the 1099-INT federal screen.
Go back and edit that 1099-INT. The PR bond interest should only be in Box 8, not also in Box 1. Click through to Which state is your $$ of exempt interest from? Be sure you have selected Puerto Rico. That will keep it as tax exempt interest in the TT/States, including TT/Calif (I just tried it and it works fine).
