that is EXACTLY the point... when filing JOINT, your MN return BEGINS with the federal Adjust Gross Income (AGI) - look at Line 1 of MN form M1. That means the TN income is INCLUDED in the first line of the MN tax return. The purpose of M1NR is to exlcude the non-MN income from the tax return, as it is not taxable in MN.
You pay state income tax a) based on where you work and b) based on your residency. Since your spouse works in TN and his residency is TN, it would only be taxed in TN (if they had income tax) and not taxed in MN.
