There is no official guidance on whether an IRA contribution can be made to a decedent’s IRA (that is, a contribution being made to an individual’s IRA after the individual dies). The only indication of the IRS’ position on this matter is private letter ruling (PLR) 8439066, in which the IRS ruled that the decedent’s estate could not contribute to the decedent’s IRA for the year of death, if the contribution is being made after the individual died. Obviously, had the IRA owner contributed the amount before death, it would have been OK .
The question then becomes, would the contribution be allowed for the previous tax-year if the individual died after the end of the year? Say- January of this year? It appears not. In the same PLR, the IRS stated that “Since the taxpayer is deceased, the contribution made by the decedent’s estate would not be a contribution for retirement purposes”, which suggests that any contribution after death is not allowed. The IRS goes on to say ( in the PLR) that “Section 1.408-2(a) of the Income Tax Regulations specifies the person who may establish and maintain an IRA to include an individual, an employer, or an employee association. The regulations do not provide that the decedent’s personal representatives, the decedent’s estate, or beneficiaries of the decedent’s estate can establish or maintain and IRA on behalf of an individual. This is because the primary purpose of the IRA is for retirement.”
In sum, the IRS is saying that a deceased person has no need for retirement funds, therefore making additions in the form of contributions to a deceased individual’s IRA is not permitted. They also explained that making such a contribution would create an “excess
IRA contribution”, subject to a 6% penalty
if not removed from the IRA by the applicable deadline.