Spousal IRA

Definition

An IRA established by a nonworking spouse ( or spouse who has little or no eligible compensation for IRA purposes) to receive a contribution (‘spousal IRA contribution’) made by his/her working spouse.

A spousal 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 § 219(f)(1). 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 establish his/her own IRA, and the contribution must be made to his/her IRA
• If the IRA is a traditional IRA, contributions cannot be made for the year the owner reaches age 70 ½ and later
• Contribution to one spouse’s IRA cannot exceed the limit in effect for the year
• The IRA cannot be held ‘jointly’
• All other IRA rules apply

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