My wife is a dependent on H4, and therefore ineligible to work or to obtain an SSN. She arrived in the US in Dec 2006. For my 2006 return:

1) Does she need to get an ITIN if I want to file as 'married, filing jointly'
2) What category should I choose on form W7? My guess was (e) "Spouse of a US citizen/ resident alien". The instructions on the W7 form, however, say that this category is for "A nonresident alien electing to file a U.S. tax return jointly with a spouse who is a U.S. citizen or resident."

Though I am a resident, does my wife qualify as a non resident?

I'd appreciate any insights.

1) Yes, she needs an ITIN.

2) Because she arrived so late in the year, she is considered a non-resident alien. Select category "e".

By filing jointly, she is a non-resident spouse filing jointly with a resident alien who is choosing to be treated as a resident alien for the entire year.

Understand that if she had ANY income from anywhere in the world, that income is subject to U.S. taxes if she chooses this option.