You should file 'married filing joint'. You need to file a non-resident Oregon return and a resident Washington return. Neither your or your husband's WA income should be taxed in Oregon.
I have the same issue. Turbo Tax effectively includes my wife's Washington income when calculating my Oregon Tax rate. We are married filing jointly. I use the Oregon non-resident return...WA has no income tax and so there is no WA return to file. This has happened for the past few years and each year Turbo Tax has me owing Oregon money yet each year Oregon sends me the over payment back. Any thoughts as to why Turbo Tax would increase my Oregon tax owed after I add my wife's Washington income?
Sorry to not have replied sooner. I am not a TT employee but a tax accountant that pops in and out to see if I can help someone. Therefore I would not know why TT has you owing each year but the good news is that Oregon recognizes the error. The only advice I can offer is to make certain you have designated your wife's income as WA income or, just thinking, since you do not have to file a WA return why just not enter those wages at all. Perhaps that will solve the ongoing problem.