Unknown to us there was a judgement against my husband with a private company. They were able to get a garnishment of his income tax return through district court. Can they take State and Federal, or just the state return?

They may take both state and Federal if they file a garnishment for them.

And there can not be a "surprise" judgement, he would have been served notice, plus all sorts of collection letters prior to a court hearing.

Also is the debt just his or both of yours. On the taxes do you have earnings or just him?