The interest from them are reported in box 3 of a 1099-INT form.
Once entered properly in box 3, of that form in the Federal section, the same $$ will not be used in the state tax return...either not included in the first place, or (more commonly ) removed is some subtraction line in the state form. How each state handles this depends on which state is involved.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
