If the percentage is less than 50%, then I believe NY taxes the whole thing. Here are the instructions from the IT-201

Line 28 – Interest income on U.S. government bonds 

Did you include interest income from U.S. government bonds or other U.S. government obligations on lines 2, 6, or 11? If No, go to line 29. 

If Yes, enter the amount of interest income earned from bonds or other obligations of the U.S. government. 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 such dividends that may be subtracted is based upon the portion of taxable income received by the mutual fund that is derived from federal obligations. 

Contact the mutual fund for further information on meeting the 50% asset requirement and computing your allowable subtraction (if any). If you include an amount on line 28 from more than one line on Form IT-201, submit a schedule showing the breakdown from each line. 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.