How Does A Non-Working Spouse Qualify for Spousal IRAs?

Sara F Gonzalez

Article Highlights:


  • Compensation Requirements
  • Spousal IRA
  • Traditional or Roth IRA?
  • Maximum Contribution

As a result of the COVID-19 pandemic, millions of people have dropped out of regular, salaried work. And guess who makes up most of these millions?

The answer.

Female employees with families.

These women may have missed out on the opportunity to save for Retirement through their employers' retirement plans while unemployed. Does this situation sound familiar to you?

However, it’s not all bad news! Those who are married have the option of accumulating retirement funds to assist you to make up for part of your lost retirement savings. Sound good to you? Let's read on!

 The spousal IRA is an often overlooked tax advantage. Got that? I'll say it again… this time in Italics… spousal IRAs.

What is a spousal IRA?

This is a type of IRA that is set up for the spouse. IRA contributions are generally only allowed for taxpayers who have remuneration (wages, tips, bonuses, professional fees, commissions, taxable alimony received, and net income from self-employment are all examples of compensation). Spousal IRAs are an exception to this rule, allowing a nonworking or low-earning spouse to contribute to his or her own IRA, sometimes known as a spousal IRA, if his or her spouse is compensated adequately.

A nonworking or low-earning spouse can contribute the same amount to a regular or Roth IRA (or both) as a working spouse. This is $6,000 in 2021. If the nonworking spouse is 50 years old or older, he or she can make $1,000 "catch-up" contributions, bringing the total contribution cap to $7,000. These restrictions apply if the couple's total compensation is equal to or more than their IRA contributions.

For instance… Tony and Rosa. Tony is working and his W-2 for the year 2021 is $100,000. His 45-year-old wife Rosa did not work during the year after preferring to care for their children at home owing to a lack of daycare options. Rosa can base her contribution on their combined compensation of $100,000 because her personal compensation of $0 is less than the contribution maximum for the year. Rosa will be able to contribute up to $6,000 to an IRA in 2021. Rosa could contribute $6,000 to her IRA even if she only worked part-time and made $2,500.

Both spouses can contribute to a regular or Roth IRA, or divide their contributions, if the total contributions do not exceed the yearly contribution maximum.retired married couple tax planning consultation

Take care here. Traditional IRA contribution deductibility and Roth IRA contribution eligibility are generally determined by the taxpayer's income:

  • Traditional IRAs - Traditional IRA contributions are not restricted by income. A tax-deductible contribution to the nonparticipant spouse's IRA can be made only if the couple's adjusted gross income (AGI) does not exceed $198,000 in 2021 if the working spouse is an active participating in any other qualifying retirement plan. Only a partial deduction is allowed if the couple's income is between $198,000 and $208,000. No amount is deductible if their AGI hits $208,000.


  • Roth IRAs — Contributions to a Roth IRA are never tax deductible. If the couple's AGI does not reach $198,000 in 2021, they can contribute to Roth IRAs in full. For AGIs between $198,000 and $208,000, the contribution is gradually tapered off. As a result, after your AGI hits $208,000 in 2021, you won't be able to contribute to a Roth IRA.

Let’s read another example just to make sense of all this… Back to Tony and Rosa… The couple's AGI is under $198,000. Rosa can designate her IRA contribution as either a deductible traditional IRA or a nondeductible Roth IRA. Rosa's permitted contribution to a deductible regular or Roth IRA would have been limited to $3,000 if the couple's AGI had been $203,000 due to the phaseout. The remaining $3,000 might have been put into a standard IRA and made nondeductible.

Contributions to IRAs for the year 2021 must be made by April 15, 2022.

You can read more advice on marriage and money by reading our articles for newly married couples, and soon-to-be-marrieds.

If you’ve got any more questions about your spousal IRA, Retirement planning or tax benefits for married couples, you can get in contact with us by booking a consultation session here!


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