I got Tails moving, but using 1P input so Sonic and Tails move together currently.

Also got my first crash in game.

;MOVE TAILS
		BTST	#J_RIGHT,JOYPAD0
		BNE.S	@MOVE1
		ADD.W	#1,TAILSX
		MOVE.W	#0,TAILSD
@MOVE1T:
		BTST	#J_LEFT,JOYPAD0
		BNE.S	@MOVE2
		SUB.W	#1,TAILSX
		MOVE.W	#$800,TAILSD
@MOVE2T:
		BTST	#J_DOWN,JOYPAD0
		BNE.S	@MOVE3
		ADD.W	#1,TAILSY
@MOVE3T:
		BTST	#J_UP,JOYPAD0
		BNE.S	@MOVE4
		SUB.W	#1,TAILSY
@MOVE4T:
		BTST	#J_BUT_A,JOYPAD0

Forgot to add "T" for BNE.S @MOVE1 - @MOVE4.