Yes, you are correct it is complicated and TurboTax can't know which income belongs to which spouse in which state. Couple that with each state has its own rules for allowing a different filing status from the federal filing status. Plus all the states begin with the Federal Adjusted Gross Income to calculate their state tax so the federal has to be done for each state.
To simplify you might consider for the future changing resident states to be the same for both of you.
See your finance/legal office for details on how to make that change.
It could be even more simple if you both change to a state that does not have a state income tax. If you are stationed in one of those states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming) it's fairly easy to change your residence to that state.
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