Spousal IRAs for Non-Earning Partners

An IRA contribution normally requires earned income equal to the contribution amount. The Spousal IRA, codified at IRC §219(c), is the lone exception: a working spouse's earned income can fund the non-working spouse's IRA, dollar for dollar. For couples where one partner takes time out of the workforce — caregivers, students, sabbatical-takers, or one spouse who simply never returned after a career change — it is the most overlooked retirement tool in the code.

The basic rule

Under IRC §219(c), a married couple filing jointly can contribute up to the IRA annual limit ($7,000 for 2025, plus $1,000 catch-up at age 50) to each spouse's IRA, even if one spouse has zero compensation, as long as combined compensation equals or exceeds the combined contributions.

A couple where one spouse earns $200,000 and the other earns nothing can fund two IRAs at $7,000 each — $14,000 of total IRA contributions. The non-working spouse is the IRA owner; the working spouse simply provides the income test.

Eligibility conditions

• Married filing jointly (MFJ). MFS is not eligible.
• Combined taxable compensation at least equal to combined IRA contributions.
• The non-working spouse must be under age limits — but SECURE Act §107 removed the age 70½ contribution restriction in 2020, so there is no longer an upper age limit on contributions (just on withdrawals via the RMD rules).

Roth vs Traditional for the non-working spouse

The same Traditional-versus-Roth analysis applies, with a useful wrinkle: deduction phaseouts depend on whether each spouse is "covered" by a workplace retirement plan. The non-working spouse is by definition not covered. If the working spouse is also not covered, the Traditional contribution is fully deductible at any income. If the working spouse is covered:

• The non-working spouse's deductibility phases out at MFJ MAGI of $236,000–$246,000 (2025) — much higher than the $126,000–$146,000 range that applies to the covered spouse.
• The Roth contribution phases out at MFJ MAGI of $236,000–$246,000 — the same standard cap that applies to both spouses regardless of workplace coverage.

For a one-income household where the earner is in the 24%+ bracket, the non-working spouse can typically deduct the Traditional IRA up to a combined household income of $246,000. The covered earner cannot.

Worked example

A married couple, both age 45. Spouse A earns $180,000 as a W-2 employee and is covered by a 401(k). Spouse B is a full-time caregiver earning $0.

• Spouse A's Traditional IRA deduction phases out at $126,000 MAGI — she is above it, fully nondeductible. She funds either a backdoor Roth or a non-deductible Traditional with basis tracking.
• Spouse B is not covered. The household MAGI is $180,000, below the $236,000 spouse-covered phaseout. Spouse B can fully deduct a $7,000 Traditional IRA contribution.
• Combined retirement savings: $7,000 (B, deductible) + $7,000 (A, Roth via backdoor) = $14,000, of which $7,000 carries an immediate $1,680 federal tax benefit at the 24% bracket.

What happens in divorce or death

The IRA belongs to the named owner — Spouse B in the example above — regardless of who funded it. In a divorce, it is divided per the property-settlement agreement or QDRO. On the working spouse's death, the non-working spouse's IRA is unaffected; on the non-working spouse's death, the IRA passes per beneficiary designation.

Common mistakes

• Funding the wrong account. The contribution must be deposited into an IRA in the non-working spouse's name. A joint account or a spousal beneficiary designation is not enough.
• Forgetting the contribution is voluntary. If the household cannot afford $14,000 of IRA contributions, fund the working spouse's first (often via match-capture in a 401(k)), then the non-working spouse's IRA.
• Treating MFS as a workaround. Married Filing Separately is not eligible for the spousal IRA. Couples filing MFS need separate earned income equal to each contribution.
• Missing the higher phaseout opportunity. Many couples assume the working spouse's coverage limits both partners' deductions. It does not.

Sources

• Internal Revenue Code §219(c), spousal IRA contributions (Cornell LII): law.cornell.edu/uscode/text/26/219
• Internal Revenue Code §219(g), deduction phaseouts: law.cornell.edu/uscode/text/26/219
• SECURE Act of 2019 §107, removal of age 70½ contribution restriction. Pub. L. 116-94: congress.gov/bill/116th-congress/house-bill/1865
• IRS Publication 590-A, Contributions to IRAs, "Spousal IRA Limit" section: irs.gov/forms-pubs/about-publication-590-a
• IRS, "IRA FAQs": irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras

RetirementCheck101's worksheet flags spousal IRA eligibility automatically when one spouse has no earned income. Explore the free educational tool.