I came to US on F1 and during 2006 I was on:

OPT Jan 2006 - Aug 2006
H1 Oct 2006 - Dec 2006.

Thus making me a dual status for 2006. But reading posts on this forum I believe I can take advantage of First Year Choice since I am married.

I filed an extension so that I can pass SPT for 2007 but now when I refer back to Pub519 (http://www.irs.gov/pub/irs-pdf/p519.pdf), On page 9 under "Choosing Resident Alien Status" it mentions that if I pass the 4 conditions mentioned I can choose to file as a resident and there is no mention of passing SPT.

Can anyone clarify if I am interpreting it correctly or do I still need to satisfy SPT?

Thanks

You have already met SPT (did so on 3 June 2007).

File jointly with your wife and include a statement that says you BOTH choose to be treated as resident aliens for all of 2006.

I understand that I did pass SPT but under First Year Choice in pub 519, it says

If you do not meet either the green card test or the substantial presence test for 2005 or 2006 and you did not choose to be treated as a resident for part of 2005, but you meet the substantial presence test for 2007, you can choose to be treated as a U.S. resident for part of 2006.

Which as I interpret, I can only be considered as resident from October to December 2006, on the other hand using the clause under "Choosing resident alien status" if I satisfy all 4 conditions I can take first year choice and claim as resident alien.

Please help me understand this.

You have met the criteria to file as a resident alien.

You must file jointly with your wife and attach the statement cited above. I assume your wife will need to complete and sign a Form W-7 to apply for an Individual Tax Identification Number (ITIN), so that form, along with a notarized photocopy of her passport, also needs to be sent with your tax return.

If you need professional help doing this, contact me at the email address below.

Can dependent exemption be claimed using First year choice test

Yes, for your children.

Your wife is NOT your dependent; she is a co-filer who is considered your equal on the return.