Since you are posting in the Military forum I assume you are military. Also, since you are asking about filing in two states I assume your (and your spouse's) home of record is MA and you (and your spouse) are stationed in NC. In that scenario, you would file a joint resident return for MA and MA would be taxing all income from all sources including your spouse's NC income. Here the MA reference.
As for NC, NC will not tax your military income or your spouse's income earned in NC if she is there solely to be with you on military orders and her state of residence/domicile is the same as yours (MA). Therefore you would file a joint NC non-resident return exluding your military pay and her NC W2 income so that anything NC withheld would be refunded.
Ultimately you will not pay NC taxes (refund) but pay MA taxes. For future reference you and your spouse need to have taxes withheld by MA not NC. See your finance/legal office for instructions on making those changes.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
