@cool_kiwi 

I recommend the following:

1)  IF the 1099-INT has more boxes with $$ in them, along with the box 8 $$ in it, remove any $$ from box 8 (& box 13 if appropriate) that came from your own state's bonds, and create a new 1099-INT with just those $$ in box 8, and tag them as coming from your own state's bonds on that separate 1099-INT.   IF a portion of those box 8 $$ came from other states, leave that portion in the original 1099-INT and tag it all as "Multiple States"  (or "More than one state" if you are using desktop software.)  ((((unless you live in Utah, then a couple other state's bond interest can be included with your own state)))).

2) could also try deleting that 1099-INT entirely, especially if it's data was imported originally.  Then create a new one and put in all the $$ manually.  (don't put in any 0.00 values in any boxes, leave them blank. )

3)  Not sure where you are seeing Special Handling, but if it's where I think you are checking a box, that refers to $$ in box 1, not box 8.....so yes, your state may not be a part of that checkbox.

4) The $$ tagged as being from your state's bonds should not show up on your state forms anywhere....just the $$ from other states should be a state income addition. 

Thanks for the ideas. I tried all of those and no change was detected. The state return still does not have the amount. It's not possible to override on the state income worksheet otherwise I would just do that. The 1099-INT information all looks correct..

@cool_kiwi 

OK, it's not clear to me exactly what is not showing up in your state form.

1)  Does none of box 8 $$ show up as additions to state income?

2) and how are you dealing with the box 8 $$? 

...2a)  are you tagging it all as "More than one state"

...2b)  or are you breaking down the box 8 $$ as some from your own state's bonds, and the remaining part as coming from "More than one state"  ?

3)  and what is the ~ total $ amount in box 8 you are tying to deal with ?