the interest is only entered once.as interest. you will get a 1099-int from the bank or government, make sure you enter in the correct box It should appear in box 3 of the 1099. it is only taxed once. box 3 denotes it as qualified US interest which is not taxable for states. .so if you have a state return the amount should appear as a subtraction. note that not all state modules are currently available or up to date.