My husband may move to CA for a new job and I am trying to figure how to do tax in the future. If we file federal tax return jointly, can we choose to file tax at CA and IL seperately as two individuals? How about a dependent who live in the IL? I am a little concerned over this because the tax rate at CA is very high.

“My husband may move to CA for a new job and I am trying to figure how to do tax in the future. If we file federal tax return jointly, can we choose to file tax at CA and IL seperately as two individuals? “--->yes, you can. It depends.During the year of 2011, he moved to CA from IL, then he needs to file his CA return as a part year resident, NOT as a non-resident of CA( as I assume that he moved to CA permanently form IL) and also he needs to file his IL return as a part year resident , NOT as a full year resident of IL. UNLESS you have income earned in CA state, you need to file your return as a full year resident of IL.So, you and you spouse need to file separate state return; he needs to file both CA and IL returns as a part year resident of IL and CA while you need to file only IL return as a full year resident of IL.
If not, I mean as long as he moved to CA from IL JUST for a new job in lieu of living in CA permanently, then he needs to file his return as a nonresident of CA and needs to file(jointly or separately if he has no IL income) his IL return as a a full year resident of IL and you(your spouse ) can claim your dependents on your federal/state return including his CA return. He can claim CA tax(es) that he paid to CA on his income that he earned in CA on his IL return. Normally you file taxes in the state that you lived in for the entire tax year, so filing separate state returns would be the right thing for you. If either of you earned income in states other than the ones you lived in, you must file in both states although, most of the time, the states will not double tax you, one state will give the other the tax credit and save you from being double taxed. Yes, in the situation you describe, filing separate state returns appears best and it is not dependent on how you file your federal returns.
“How about a dependent who live in the IL? I am a little concerned over this because the tax rate at CA is very high.”---->As said above, as long as yu file your fed return jointly , you can claim your dependent on your fed return and you can claim your dependent on your IL return as a full year resident of IL and your spouse can claim his dependent on his CA return as a nonresident of CA.