Married couples working in 2 different states California & Colorado. Can we file both federal and state tax returns together? If yes, does only one person need to submit?

Yes, you can file your federal and state returns joint even if you work in different states.  You will be able to indicate your state residency and the state source income in the California and Colorado section of TurboTax.  Follow the prompts, and if you have specific questions as you are working through, you can add to this post!