IRS Spousal IRA Contribution and Eligibility Rules

A spousal Individual Retirement Arrangement, or IRA, allows a working individual to make contributions on behalf of a spouse who has little to no earned income. These contributions are made to a traditional or Roth IRA under a set of tax code rules. The purpose of these provisions is to enable families to save for retirement for both spouses, helping them build a more substantial retirement nest egg.

Spousal IRA Eligibility Requirements

To make a spousal IRA contribution, a couple must meet specific criteria set by the Internal Revenue Service. The couple must be legally married and file a joint federal income tax return for the year in which the contribution is made. Filing as “married filing separately” disqualifies a couple from making a spousal IRA contribution.

The couple’s total taxable compensation must be sufficient to cover the contributions for both spouses. Taxable compensation includes wages, salaries, commissions, and self-employment income. It does not include income from investments, pensions, or Social Security benefits.

The spouse receiving the contribution must have either no taxable compensation for the year or compensation that is less than the annual IRA contribution limit. The spousal IRA rules are designed to accommodate this scenario, allowing the higher-earning spouse’s income to fund the IRA of the lower-earning spouse.

Contribution Rules and Limits

The amount that can be contributed to a spousal IRA is governed by the same annual limits that apply to all IRAs. For 2025, the maximum contribution is $7,000 per person. This means a working spouse can contribute up to $7,000 to their own IRA and another $7,000 to their spouse’s IRA, provided eligibility is met. These contributions must be made to separate IRA accounts in each spouse’s name.

An additional catch-up contribution is available for individuals age 50 and older. For 2025, this allows for an extra $1,000 to be contributed, bringing the total potential contribution to $8,000 for that individual. If the spouse for whom the contribution is being made is age 50 or over, their spousal IRA can receive this additional amount.

The total combined contributions for both spouses cannot exceed their joint taxable compensation for the year. For example, if a couple’s joint earned income is $12,000, they cannot contribute the maximum of $7,000 to each IRA. Their total combined contributions would be capped at $12,000, which they could allocate between their two IRAs as they see fit, up to the individual limit for each account.

Spousal contributions can be made to either a traditional IRA or a Roth IRA. Contributions to a Roth IRA are subject to income limitations. For 2025, the ability for a married couple filing jointly to contribute to a Roth IRA begins to phase out at a Modified Adjusted Gross Income (MAGI) of $236,000 and is eliminated at a MAGI of $246,000.

Tax Deductibility of Contributions

The tax treatment of spousal IRA contributions depends on whether the funds are placed in a traditional or a Roth IRA. Contributions to a Roth IRA are never tax-deductible, as these accounts are funded with after-tax dollars. The tax advantage of a Roth IRA comes at retirement, when qualified distributions are tax-free.

For contributions to a traditional spousal IRA, deductibility depends on the working spouse’s access to a workplace retirement plan, such as a 401(k). If the working spouse is not covered by a retirement plan at their job, the full amount of the contribution to the traditional spousal IRA is deductible, regardless of the couple’s income.

If the working spouse is covered by a retirement plan at work, the deductibility of the contribution to the spousal IRA is subject to phase-out limits based on the couple’s Modified Adjusted Gross Income (MAGI). For 2025, the deduction for a spousal IRA contribution is phased out for couples with a MAGI between $236,000 and $246,000. If their MAGI exceeds $246,000, no deduction can be taken.

Setting Up and Reporting a Spousal IRA

A “spousal IRA” is not a special type of account but a standard traditional or Roth IRA established in the name of the spouse receiving the contributions. The account is owned solely by that spouse, who has full control over the investments and uses their own Social Security Number or ITIN. The contributing spouse has no ownership rights to the account.

When a deductible contribution is made to a traditional spousal IRA, it must be reported on the couple’s joint federal income tax return. The deduction is reported on Schedule 1 of Form 1040. This is where the total deductible IRA contributions for both spouses are entered, reducing the couple’s adjusted gross income.

The financial institution that holds the IRA will send Form 5498, IRA Contribution Information, to the account owner and the IRS by May 31 of the following year. This form reports the total contributions made to the account for the tax year and should be kept for tax records.