My H1b Visa went effective in Oct 2011, so I'm not able to file tax return as resident (cannot pass Substantial Presence Test). However, my wife was in U.S on a B2 visa for 7months, so she can pass the Substantial Presence Test. Can she file a joint tax return for both of us as resident? My wife has no income or SSN...

Yes, you can file jointly, even if your wife is not in the U.S. She will need to complete and sign Form W-7 AND sign the joint tax return, plus get a photocopy of her passport picture page notarized and apostolle'd in her home.

There is sufficient time, because you must wait until 1 June 2012 to meet the Substantial Presence Test before you can file.

If you want my professional help, you can find my email address in my profile.

Yes, you can file joint return as residents. Complete your joint tax return and attach W-7 (ITIN application) with your tax return.

Take care that you do not make worldwide income taxable when it need not be. Email me if you have questions.

If you file joint return as residents, you MUST report worldwide income for 2011. If you paid taxes in foreign country, file form 2555 Foreign Income Exclusion and/or form 1116 Foreign Tax Credit.

Actually, in this case HE can choose. If he files as RA with his wife - worldwide income for him is taxable. If he files as NRA alone (MFS) world wide income not taxable for him. I would calculate both ways and see which works out most favorable. The NRA rules are not as generous in some circumstances, so it depends upon the balance of that effect and the amount of tax on worldwide income. Be sure to figure the foreign tax credit amount, and do not overlook any tax treaties that might be applicable.