That question only refers to interest in box 1 of the 1099-INT.
Savings bond and US Treas interest will only show in box 3 of the 1099-INT, and those $$ are handled automatically. Since no state taxes box 3 $$, the software doesn't need to ask about that (yes, the page where the Q is asked could make it clearer which box(s) are involved) ) You'll have to check your NY Forms to make sure it's actually removed.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
