From your example, the amount you are entering in your Adjustment Amount screen is being deducted from your total interest.
$3,400 - $1,247 = $2,153
If $2,153 is showing on your Pennsylvania summary screen, then the Adjustment Amount TurboTax prompted you to enter was the amount that was not taxable in PA. If you entered $2,153 in that screen, then the summary would reflect PA taxable interest as $1,247.
@machellmccoy
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