A spousal IRA is an ordinary Traditional or Roth IRA opened in the name of a spouse who earns little or no income, funded on the strength of the other spouse’s earnings. Formally called the Kay Bailey Hutchison Spousal IRA, it lets married couples build retirement savings for both partners even when only one has a paycheck. For 2026, the working spouse can put up to $7,500 into the non-working spouse’s IRA, or $8,600 if that spouse is 50 or older.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
The account itself is not special. Once funded, it behaves like any other IRA: the non-working spouse owns it outright, picks the investments, and controls withdrawals. The only distinguishing feature is the source of the qualifying income.
Who Can Use a Spousal IRA
Three conditions all have to be true. You must be legally married. You must file a joint federal return. And the working spouse must have enough earned income to cover contributions to both IRAs combined. Filing separately eliminates access to the spousal provision entirely.2Office of the Law Revision Counsel. 26 U.S. Code 219 – Retirement Savings
Earned income means wages, salaries, commissions, and net self-employment income. Pensions, investment returns, rental income, and Social Security don’t count. The non-working spouse doesn’t need zero income. They just need to earn less than the other spouse. Someone earning $5,000 while their partner earns $80,000 still qualifies; the lower earner is the one whose IRA gets funded under the spousal rules.3Internal Revenue Service. Publication 590-A: Contributions to Individual Retirement Arrangements
How Much You Can Contribute in 2026
The 2026 IRA contribution cap is $7,500 per person. A working spouse can fund their own IRA and the spousal IRA up to $7,500 each, for a combined $15,000.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
If either spouse is 50 or older, that person’s cap rises by $1,100 to $8,600. Both spouses over 50 can contribute up to $17,200 combined.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
One ceiling overrides all of this: combined contributions to both IRAs cannot exceed the working spouse’s earned income. If the working spouse earns $12,000, the couple can put no more than $12,000 total into both accounts, regardless of the per-person cap.4Internal Revenue Service. Retirement Topics – IRA Contribution Limits
These dollar limits apply the same way whether the account is Traditional or Roth.
Opening and Funding the Account
The spousal IRA is opened in the non-working spouse’s name only. It is never a joint account, even though the working spouse provides the money. The non-working spouse is the sole owner and controls investment choices and withdrawals.
The non-working spouse picks a brokerage, bank, or other custodian and completes the application. That application asks whether the account should be Traditional or Roth, so decide the tax treatment first. The working spouse then transfers funds and designates the deposit as a contribution to the non-working spouse’s IRA for the relevant tax year.
Contributions for a given tax year can be made from January 1 of that year through the federal filing deadline the following April.5Internal Revenue Service. IRA Year-End Reminders That extra window gives couples time to finalize income numbers before deciding how much to put in.
Traditional or Roth: Which Spousal IRA to Choose
Both types grow tax-deferred while the money is inside the account. The difference is when you pay tax.
Traditional Spousal IRA
Contributions may be tax-deductible in the year you make them; withdrawals in retirement are taxed as ordinary income. If neither spouse is covered by a workplace retirement plan, the deduction is available in full at any income level.6Internal Revenue Service. IRA Deduction Limits
The rules get more interesting when the working spouse has a 401(k) or similar plan. Two separate phase-outs apply, and the one that governs the spousal IRA is more generous than most people expect. Because the non-working spouse is not personally covered by a workplace plan, their deduction phases out between $242,000 and $252,000 of modified adjusted gross income for 2026.7Internal Revenue Service. Notice 2025-67: 2026 Amounts Relating to Retirement Plans and IRAs Below $242,000, the spousal deduction is available in full. Above $252,000, it disappears. In between, you get a partial deduction.
The working spouse’s own IRA deduction faces a much lower phase-out when they’re covered at work: $129,000 to $149,000 for 2026.7Internal Revenue Service. Notice 2025-67: 2026 Amounts Relating to Retirement Plans and IRAs A couple earning $180,000 where the working spouse has a 401(k) would lose the deduction on the working spouse’s own Traditional IRA yet keep the full deduction on the spousal IRA. This is where most couples leave money on the table, assuming both phase-outs are the same and skipping the spousal contribution.
Roth Spousal IRA
Roth contributions are made with after-tax dollars and are never deductible. Qualified withdrawals in retirement, including earnings, come out completely tax-free. A Roth spousal IRA also has no required minimum distributions during the owner’s lifetime, which is useful for estate planning or for couples who don’t want to be forced into withdrawals later.
Roth eligibility is based on income rather than workplace plan status. For 2026, joint filers can make full Roth IRA contributions with MAGI below $242,000; the ability to contribute phases out between $242,000 and $252,000 and disappears at $252,000.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
Withdrawals and Required Distributions
Pulling money from a spousal IRA before age 59½ triggers a 10% early withdrawal penalty on top of any income tax owed.8Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions Exceptions include permanent disability, qualified first-time home purchases up to $10,000, and certain unreimbursed medical expenses. With a Roth, you can always withdraw your own contributions (not earnings) penalty-free and tax-free, since that money was already taxed.
Traditional spousal IRAs are subject to required minimum distributions. If the owner was born before 1960, RMDs start at age 73. For those born in 1960 or later, the starting age is 75.9Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs10Congressional Research Service. Required Minimum Distribution (RMD) Rules for Original Owners The first RMD is due by April 1 of the year after you reach that age; each subsequent one by December 31. Missing a deadline costs 25% of the amount you should have withdrawn.
Roth spousal IRAs have no RMDs during the owner’s lifetime, so the money can sit and grow indefinitely.
Fixing Excess Contributions
Putting in more than the annual limit, or more than the working spouse’s earned income, creates an excess contribution. The IRS charges a 6% excise tax on the excess for every year it remains in the account, and that tax compounds until the problem is fixed.
The cleanest fix is to withdraw the excess, plus any earnings on it, before your tax filing deadline including extensions. A timely removal avoids the 6% penalty entirely, and the SECURE 2.0 Act eliminated the separate 10% early withdrawal penalty that previously applied to the earnings portion for people under 59½. For a spousal IRA, the usual cause of an excess is overestimating the working spouse’s earned income. Check the number carefully before the April deadline if income is tight.
Spousal IRAs in Divorce
The account belongs to the spouse whose name is on it, and divorce doesn’t change that. The balance is often split as part of the property settlement, though, and federal law allows a tax-free transfer of IRA assets to a former spouse when the transfer is spelled out in the divorce decree or separation agreement and moves directly between IRA custodians.11Office of the Law Revision Counsel. 26 U.S. Code 408 – Individual Retirement Accounts After the transfer, the receiving spouse controls the money as their own IRA.
After the divorce, the former non-working spouse can no longer receive spousal contributions from their ex. They can still contribute to the existing IRA on their own, but only with their own earned income or by remarrying and filing jointly with a spouse who has earnings.
What Happens When the Owner Dies
A surviving spouse has the most options. They can roll the inherited IRA into their own IRA and treat it as if it had always been theirs, resetting the RMD clock and naming new beneficiaries. Alternatively, they can keep it as an inherited IRA and take distributions based on their own life expectancy.12Internal Revenue Service. Retirement Topics – Beneficiary
Non-spouse beneficiaries generally must empty the account within 10 years of the owner’s death.12Internal Revenue Service. Retirement Topics – Beneficiary If the original owner had already started RMDs, the beneficiary must also take annual distributions across that 10-year window. A narrow group of eligible designated beneficiaries, including minor children of the owner, disabled or chronically ill individuals, and beneficiaries no more than 10 years younger than the deceased, can stretch distributions over their own life expectancy instead.