I have a 1099-INT with both box 1 (total interest not including box 3) and box 3 (interest on US savings bonds and treasury obligations) interest amounts. I paid accrued interest on some treasury notes/bonds and entered that at the bottom of the TurboTax 1099 form under adjustments to interest, marking the box for "accrued interest". It subtracted correctly on my schedule B generating the special notated line for accrued interest.
My issue is when the box 3 interest flows through to my state taxes as a deduction, that TT is prorating the accrued interest between Box 1 and Box 3 interest. The accrued interest should be reducing my tax deduction at the state level as it all was caused by the government bonds. How do I tell Turbotax that the accrued interest relates only to the Box 3 interest income and none of it to Box 1 interest? (Without fixing this, I would be taking too much deduction on my state taxes for interest on treasury obligations.)
Thanks
