I came to US in oct 2006 on L1 visa. My wife and son came in Dec. I started paying for their medical insurance since oct. Now I have received my W2 form.
Can I claim my wife and son as dependents to get the tax benefit. I assume I need to file 1040NR form filing jointly with wife.

Which software or online application would be best for filing the returns in my case?

Thanks
Jits

You CANNOT file jointly on either Form 1040NR 04 1040NR-EZ, nor can you file either form on-line. They must be mailed. You MAY be able to report your wife and child as dependents on Form 1040NR.

To file jointly, you must BOTH choose to be treated as resident aliens for all of 2006. That requires you to report ALL of your worldwide income. If you need to request ITINs for wife and child, again you cannot file on-line; it must be mailed to the ITIN center in Austin, Texas.