When you enter on the federal return the tax-exempt interest, you need to make sure that you enter it in box 8 on the 1099-INT input screen. This requires you to check the box "There is more information than just in box 1" (paraphrase). Then on a subsequent screen, you will be asked from what state the munis come (in my test, I chose New York).
Then go to your Indiana interview. After a few screens, you should see a screen entitled "Interest on Out-of-State Municipal Obligations". You can enter the amount of interest here that is taxable in Indiana.
But I suspect that you won't see this Indiana screen if you didn't enter the muni correctly on the federal return.
