I resolved the issue and did not see a similar question/answer posted so I am sharing. Under the Federal "Personal Info" tab I had to revisit my spouse's information and select checkboxes that say:
"Spouse did not live with me at any time between July 1, and December 31" and "I lived apart from Spouse for all of 2021".
Subsequently, in the next menu I had to select the box to confirm that spouse had income and will file a tax return and that no one else could claim Spouse as their dependent.
This cleared the error asking me for MFS Fed AGI.
