My wife and I worked and lived in California for the first half of the year, then in July she moved to Pennsylvania (to live and work) and I stayed to live and work in California. The compensation is always within each state. I plan on filing MFJ for the federal.
For state: I believe she needs to file a partial residence MFS tax return for Pennsylvania, but can I just file a MFJ tax return for both of us in CA? Or does it have to be two MFS for CA (one for me and a partial residence for the wife)?
If If you file a joint tax return for federal purposes, you will have to file a joint return for California. Your wife can use a Married Filing Separate status for Pennsylvania, and you are not required to file a Pennsylvania return.
In this scenario, do the PA earnings after she moved need to be reported on the CA MFJ tax return?
It depends. Is she still a California resident, just working in Pennsylvania, if so yes. In this case, she will be taxed by both states, but California will issue a credit based on the amount of PA tax paid. If she changed her residency to PA, then she does not have to report it in California.