Should taxable portion of tax exempt interest transfer to NYS tax return?

[tavernese]

I have Tax exempt interest from sources outside on NY that is not transferring to my NYS Return, can anyone help?

[JotikaT2]

After you enter your federal tax-exempt interest, you should see a screen like the following:

Select the pull-down menu and select the state, if applicable.  If none of the states apply where the interest is earned, select None of these apply.

Proceed to your state interview section and go through the screens until you see the following screen:

Make your entries here to ensure the amount taxable in New York is reported correctly.

[SteamTrain]

The second picture above, only refers to US bond interest.

For Federal Exempt Municipal Bond interest reported on either: box 11 of a 1099-DIV form, or box 8 of a 1099-INT form.....there is a followup page (shown below for an NC example).   

You do NOT select NY as the sole state in the top box unless ALL of the tax-exempt Muni interest came from NY bonds.  Normally, you just go to the end of the list of states and select "Multiples States" for all of it.....or, if you want to take out the NY bond portion, you put a check in the box, and break out your own state and the US territories as shown below (for NC...you'd do NY):

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