Spousal IRA Contribution – for older, non-working spouse

Submitted by Kristen Crouthamel on Tue, 2020-05-12 18:48

Hello – With the 70.5 age limit now lifted for IRA contributions (SECURE Act), could a younger, still-working spouse (she is 60) contribute to an IRA of an older spouse (spousal contribution) who is over age 70 (he is 71)? Of course the MAGI appears to need to be under $196,000 to make this IRA contribution fully deductible because she is working and is covered by an employer plan – but he is not (please confirm if I have that correct also). I guess the question is, when they lifted the age-restriction, did that apply to ANYONE – working or non-working? Or just the income-earning spouse?
Thank you.



Submitted by Alan - IRA critic on Tue, 2020-05-12 20:25

  • For 2020 and beyond, a traditional IRA contribution can be made including by spousal contributions as in this case. In this case the deduction for this contribution would phase out beginning at 196k of MAGI, which also is the MAGI limit under which Roth contributions begin phaseout. 
  • There is also a tough anti abuse requirement for any deductible TIRA contribution, spousal or not, made for a taxpayer who has reached 70.5 and plans to make QCDs, now or later. The amount of any QCD is reduced by the amount of all deductible TIRA contributions made. This rule is intended to eliminate recycling such deductible contributions into QCDs. 
  • If the older spouse here is subject to income phaseout, the only option left is a non deductible TIRA contribution, and these do not impair QCDs. Not sure if the older spouse already has no basis in his IRA would want to make such a contribution and then deal with Form 8606 from then on. If income phaseout is not applicable, but modest QCDs are planned, a spousal Roth contribution is probably the best option.

Submitted by Kristen Crouthamel on Wed, 2020-05-13 13:43

Thank you.  So the age of the older, non-working spouse has no bearing.  The rest of the informatoin is helpful as well.  And yes, their MAGI will be under $196,000.  Appreciate the quick repsponse.

Submitted by Alan - IRA critic on Wed, 2020-05-13 14:19

Correct, the age of the older spouse as well as the younger spouse is no longer a factor.

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