Updated October 24, 2026. Quick answer: Line 28 of New York Form IT-201 is where you report interest income on U.S. government bonds. The booklet opens the line with “Did you include interest income from U.S. government bonds or other U.S. government obligations on lines 2, 6, or 11?” The amount goes on a line of the subtractions block, and this page walks through what the booklet and the form print for it.
What this line does
The booklet’s instructions for this line are headed “Line 28: Interest income on U.S. government bonds”. The form’s own label for line 28 is “Interest income on U.S. government bonds”. Line 28 sits on page 2 of the form, in the column headed “New York subtractions”, where the form also prints “Add lines 25 through 31” as line 32.
Lines 26 and 29, the neighbours of this line, are covered on the New York IT-201 pension and annuity income exclusion page. For the whole sequence see New York Form IT-201 line by line.
Who it applies to
The booklet makes the line conditional on one question: “Did you include interest income from U.S. government bonds or other U.S. government obligations on lines 2, 6, or 11?” The answer decides the next step. “If No, go to line 29.” “If Yes, enter the amount of interest income you earned from bonds or other obligations of the U.S. government.”
Interest on bank accounts and similar income is reported on the form’s line 2, which reads “Taxable interest income”. Ordinary interest from other sources stays there; line 28 is for the government bond part. To see how New York treats interest and dividends generally, read whether New York taxes dividends and interest.
What the instructions say
| Line | What the form says |
|---|---|
| Heading | “Line 28: Interest income on U.S. government bonds” |
| The question | “Did you include interest income from U.S. government bonds or other U.S. government obligations on lines 2, 6, or 11?” |
| If No | “If No, go to line 29.” |
| If Yes | “If Yes, enter the amount of interest income you earned from bonds or other obligations of the U.S. government.” |
| Mutual fund dividends | “Dividends you received from a regulated investment company (mutual fund) that invests in obligations of the U.S. government and meet the 50% asset requirement each quarter qualify for this subtraction.” “The portion of the qualifying dividends that may be subtracted is based upon the portion of the taxable income received by the mutual fund that is derived from federal obligations.” |
| Asking the fund | “Contact the mutual fund for additional information on meeting the 50% asset requirement and calculating your allowable subtraction (if any).” |
| Amounts from more than one line | “If you include an amount on line 28 from more than one line on Form IT-201, submit a schedule on a separate sheet showing the breakdown from each line.” |
| Lines 28 and 31 | “Do not list the same interest more than once on lines 28 and 31;” “see the instructions for Form IT-225, subtraction modification numbers S-121 and S-123.” |
| Partnership or S corporation income | “If you have either of the addition or subtraction modifications in the chart below, relating to your partnership or S corporation income, include the amount on the corresponding line of Form IT-201.” |
| Modification code ES-125 (Step 4 chart) | The chart row for code ES-125 reads “Interest income on U.S. government bonds” and lists line number 28. |
The figures the form prints
One figure sits inside a single running sentence of the line 28 instructions: “Dividends you received from a regulated investment company (mutual fund) that invests in obligations of the U.S. government and meet the 50% asset requirement each quarter qualify for this subtraction.” The booklet adds “Contact the mutual fund for additional information on meeting the 50% asset requirement and calculating your allowable subtraction (if any).” The fund, not the booklet, reports how much of your dividends qualify.
Where the result goes next
Line 28 is one of the seven amounts the form adds on line 32. The form’s label reads “Add lines 25 through 31”, and line 33 then reads “New York adjusted gross income (subtract line 32 from line 24)”. Line 33 is covered on New York Form IT-201 line 33.
For the federal side of interest income, see Form 1040 lines 2a and 2b, and for the state overview see New York retirement taxes.
Edition and line numbers
This page reads Form IT-201-I, Instructions for Form IT-201, Resident Income Tax Return (2025), and Form IT-201, Resident Income Tax Return (2025), New York State Department of Taxation and Finance, for tax year 2025, the current file the New York State Department of Taxation and Finance served on 2026-10-24. Check the edition printed on your own form and use that edition’s line numbers.
Common mistakes
- Listing the same interest on lines 28 and 31. The booklet says “Do not list the same interest more than once on lines 28 and 31;”
- Combining amounts from several lines with no breakdown. The booklet says “submit a schedule on a separate sheet showing the breakdown from each line.”
- Treating every mutual fund dividend as eligible. The booklet limits the subtraction to funds that “meet the 50% asset requirement each quarter”.
Related: whether New York taxes dividends and interest, New York retirement taxes, Form 1040 lines 2a and 2b, and the New York IT-201 pension and annuity income exclusion page.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Talk to an advisor about retirement tax planning
For U.S. investors with $250,000 or more in investable assets. WiserAdvisor is an independent service matching you with 2 to 3 vetted advisers. Its form asks for your ZIP code and answers to a few questions; a match is not guaranteed.
Free to request, with no obligation to hire. By submitting, you consent to calls, texts and emails from WiserAdvisor and up to three advisers. Advisers pay for introductions.
Clear Money Guide may earn a referral payment for a qualifying completed form. An introduction is not a Clear Money Guide recommendation.
Opens on WiserAdvisor’s site in a new tab.
Explore advisor help with retirement income taxes
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment for a qualifying submitted form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Form IT-201-I, Instructions for Form IT-201, Resident Income Tax Return (2025), New York State Department of Taxation and Finance: www.tax.ny.gov
- Form IT-201, Resident Income Tax Return (2025), New York State Department of Taxation and Finance: www.tax.ny.gov
- Related official page (not quoted): New York State Department of Taxation and Finance, personal income tax forms and instructions page: www.tax.ny.gov
Read from the state revenue documents linked above on October 24, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer or the state revenue department is the right place to confirm anything consequential.