I do taxes for a lot of noncitizens working in the US who are here on H1B visas. I understand that if they don't meet the substantial presence test the first year they are here, that they can file as dual status. What if they do meet the substantial presence test the first year they are here? For example, a software engineer (single) comes to the US and arrives in Seattle, Washington on March 1, 2007. He is still in the US. Can he file only a 1040 listing world-wide income or does he have to file dual-status (NR for Jan/Feb and 1040 for Mar-Dec). I have read the IRS information on this and it appears that the first year you must file dual-status (unless you are married and both elect to file as residents). I'm hoping I'm wrong as I have a lot of clients who are insisting on filing only as a resident if they are present in the US 183 days of the current calendar year. The big difference, of course, is that you get the standard deduction.
Thank you for your help.

If they arrived on or before 1 July, they have met the Substantial Presence Test. They MUST file dual-status unless they are married, in which case they can file jointly and both CHOOSE to be treated as resident aliens for the entire year.

If they arrived on or after 2 July, filing dual-status is an OPTION, not a requirement. Most of the time, filing dual-status offers NO tax advantages, so it is simpler for them to just file as a non-resident alien.

If they arrived

It is remarkable that you prepare tax returns for a lot of people with these circumstances and yet you don't know the rules. If you do not have the knowledge to prepare the tax returns, you should refer them to someone who has the knowledge.

If you (mggallegos13) entered the U.S. before July 1, then you are a dual status. You can only file Dual status tax return if you are single. You can choose to file joint return as residents if you are married.

Yes, on dual status tax return you don't get standard deduction. You only get itemized deductions. For your resident period you get all other adjustment deductions that are available to the residents.