As a discussion point,
I seem to recall that last year, one state started to allow a state deduction for the "portion" of the distribution that represented US bond interest...but most states have no such deduction from state income and will tax the whole distribution. (For a 1099-R from an IRA)
I don't recall which state that was (somewhere in the Northeast US )…..but as a practical point, unless the entire IRA holding is distributed, it would be nearly impossible to track the sub-portion of a distribution that is from US bond interest...and even if you could, you would likely have to keep your own meticulous detailed records in such a way that would drive you nuts and lead to eternal regrets that you ever started doing so.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
