I am a US citizen living abroad, filing jointly for the first time with my non-resident alien wife. Can we claim a "making work pay" credit of $800? Or just $400?

On the one hand, I know it says that non-resident aliens cannot claim this credit. So can we just claim $400 (for myself)?

On the other hand, if I just fill out the form (schedule M) with my SSN, it simply says that I can put $800 if I'm married filing jointly. It doesn't say my wife has to have a SSN as well. Reading the instructions of schedule M, it says who cannot file: non-resident aliens and those who can be claimed as dependents. For non-resident aliens it does not say more, but for dependents it goes on to specify that if I'm married filing jointly then neither I nor my wife can be claimed as dependents. Since it does not make such restrictions on a spouse who is a non-resident alien, it leads me to believe that if only one is a US citizen then its OK.

Please tell me which is true?

If you file jointly with your wife, you need to make the choice to treat her as a resident alien and add a statement to your return the first time you do that. Her worldwide income needs to be reported as a resident alien. Resident aliens are eligible for the MWP

When you file joint return, it means that your nonresident spouse has chosen to be treated as resident. You will get Making Work Pay credit.
Both must report worldwide income on the joint return.