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February 16, 2009

Spousal IRA Contribution

Your Guide

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Definition

An IRA contribution is made by a working spouse on behalf of the other spouse who has little or no income, generally income less than the contribution limit in effect for the year.

The spouse, for whom the spousal IRA contribution is made, uses the working spouse’s income as the basis for meeting the eligibility requirement (for making an IRA contribution) that an individual must have eligible compensation/income of at least the amount of contribution being made.

Referring Cite

IRC §219(c)(2), IRC § 408(a), IRC § 408A

Additional Helpful Information

In order for one spouse to make an IRA contribution on behalf of the other spouse, the following requirements must be met:

  • They must be a married couple, as defined under federal law
  • They must file a joint federal income tax return
  • Their taxable compensation/income must be sufficient to cover the IRA contribution
  • The  IRA contribution limits must be adhered to
  • The spouse for which the contribution is being made must fund his/her own IRA , if he or she wants to make a contribution , i.e. the IRA cannot be a joint account. The working spouse is not required to make a contribution for himself or herself
  • If the IRA is a traditional IRA, contributions cannot be made for the year the owner reaches age 70 ½ and later

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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