Spousal IRA: How a Working Spouse Funds an IRA for a Non-Working Spouse

A Spousal IRA lets a working spouse use their earned income to fund an IRA for a spouse that may earn little or no money, if the spouses file jointly and the working spouse's earned income covers both contributions. The Spousal IRA is just like any other Traditional or Roth IRA, but it has to be opened in the non-earning spouse's own name, subject to the same $7,500 limit for 2026.

There is no actual “Spousal IRA” product that you can just go and purchase or open at your local bank, it’s simply a provision of the tax law that allows the income from one spouse to be used to fund an individual retirement account (IRA) of the other spouse.

What is a spousal IRA?

Normally, you have to earn your own income to be eligible to open and fund an IRA. The spousal provisions of the tax code (also called the Kay Bailey Hutchison Spousal IRA) remove this eligibility limitation on married individuals filing a joint federal income tax return, so even if one spouse has no earned income because she/he is unemployed, between jobs, or semi-retired, that spouse may still maintain an active IRA (and thus continue to grow her/his retirement savings).^[1] The account itself is ordinary. It can be a traditional IRA or a Roth account opened at any bank or broker in the name of the non-earning spouse and owned and controlled by such spouse. The only reason why it is referred to as "spousal" is where the money legally comes from.

Can a spouse with no income have an IRA?

Yes. Many spouses mistakenly believe that if their spouse does not have an earned income, that spouse will be blocked from contributing to a retirement account in the same year. That is not correct. The block is not the spouse's lack of income, it is the household's, and when filing jointly, both incomes are treated as joint earnings. Thus, if there is sufficient wage or self-employment income for two contributions (from the spouse with an earned income), the other spouse can contribute the maximum amount allowed for an IRA.

How much can each spouse contribute in 2026?

Each spouse receives the standard IRA contribution amount, which is $7,500 for 2026, or $8,600 if you are age 50 or older. The "catch-up" is an additional $1,100 added to that limit.^[2] A Spousal IRA doesn't raise or combine those limits, but instead it allows couples with only one income producing source to utilize both of their allowed contributions. The only restriction as to how much money a couple can contribute to IRAs is based on what the working spouse earns. If the working spouse earns enough so that his/her compensation covers all of the couple's combined contributions into both IRAs then there is no issue. If he/she does not earn enough compensation to cover all of the couple's combined contributions into both IRAs then their total contributions will be limited by whatever compensation he/she earns. Therefore if he/she earns $10,000, the couple cannot contribute $15,000 between both accounts. Couples where neither spouse is fifty years old or older may add up to $15,000 in IRAs, while couples who are at least fifty years old can add up to $17,200 per year in IRAs using this method (with both catch-up amounts). Contributions can be made directly into Traditional or ROTH IRAs or any combination thereof, and each spouse does not need make the same choice regarding whether they want to make a traditional IRA contribution versus making a ROTH contribution. If either spouse also has self-employment income, check the self-employed IRA contribution limits before layering a spousal IRA on top of a business plan.

Exceeding the earned-income cap is not without harm. Any amount that the working spouse’s compensation does not cover is considered an "excess contribution," and there will be a 6% excise tax charged under 26 U.S.C. 4973 by the IRS for each year until it is corrected.^[3] Removing this penalty can be accomplished when you withdraw the excess (plus its earnings) prior to your filing deadline (including any extension), but the contribution itself must land by April 15. That deadline cannot be pushed back by an extension.

Should the spousal IRA be traditional or Roth?

A factor that weighs heavily in determining whether an individual should choose to contribute pre or post tax dollars (Traditional vs Roth) is that their non-earning spouse’s retirement savings often have decades to grow prior to retirement. Many couples may be at a lower tax bracket during working years than they will be when retired. Therefore, a Roth would tend to provide better results for them by using after-tax dollars now with no taxes due later. The Roth version of a workplace plan follows this same logic if you also sponsor a SIMPLE IRA.

What are the spousal IRA income limits for 2026?

Whether the couple will be able to claim either the traditional deduction or the Roth depends on their Modified Adjusted Gross Income ("MAGI") and on which spouse is covered by a retirement plan through their employer for the purpose of claiming a traditional deduction. For example, if neither spouse is covered by a plan at work then there is no income limit on the traditional deduction. If the spouse who contributes money into the IRA is covered by a workplace plan, the phase-out range for claiming that deduction runs from $129,000 to $149,000 for Married Filing Jointly ("MFJ") in 2026. If that spouse is not covered by a workplace plan and his/her spouse is, then the phase-out range rises to $242,000 to $252,000.^[4]

The Roth IRA operates independently, with contributions being phased out for married couples filing jointly ($242,000 to $252,000), above which a direct Roth contribution will be prohibited. However, there are options available for a household making over this threshold, as they may still contribute nondeductible traditional funds, the first step in creating a backdoor Roth. This explanation is based on joint returns only, as married-filing-separately does not permit the non-income earning spouse to utilize their spouse’s income and it collapses the Roth limits into a far tighter band.

Who qualifies for a spousal IRA?

There are three requirements that have to align in order for you to qualify, and everything falls under 26 U.S.C. 219(c). The first is that the two of them will be legally married and filing a joint federal return for the calendar year.^[5] The second requirement is that the working spouse will receive enough "taxable" compensation from an employer (such as wages, salary) or through self-employment (i.e., net profit), so that it meets or exceeds the total amount going into both IRAs. Compensation does NOT include investment income, social security income or pension income, therefore these can't be included in this calculation. Lastly, if the non-working spouse is putting money into either a traditional IRA or a Roth IRA, there are some very specific account rules that must also be met by that spouse: traditional IRAs do not now have an age limitation, whereas the income limits which determine whether one may put money into a Roth depend upon how much money was earned jointly during that calendar year. Note that the non-working spouse needn't have made literally zero income during the year, since the rule tops up whatever they earn on their own up to the annual limit.

The Bottom Line

A Spousal IRA is not a special account, just another name for a Traditional or Roth Individual Retirement Account (IRA) that a working spouse funds for their lower earning or non-earning spouse who files jointly with them. The contributions are made from the couple’s total household income. For 2026 each spouse may contribute $7,500, or $8,600 at 50 and older, up to the working spouse's earned income. First find your joint income phase-out ranges, then open a new account prior to your tax filing deadline.

This guide is educational and summarizes IRS rules for spousal IRA contributions. It is not investment, legal, or tax advice. Your account documents and current IRS limits control. Talk to your tax advisor about your household's circumstances.