ARGH! After correcting the selection it didn't prompt for a state and the portion of total for that state.
I had to then go manually into the Schedule B 1099-DIV form/worksheet associated with the activity, and find the "Tax-Exempt Interest Dividends State Allocation", and allot a portion to KY and the rest to XX (for all other states)!
THEN it showed up properly in KY 740 Sch M
