By Sarah Brenner, JD
IRA Analyst

Many individuals find themselves stepping away from a job for reasons such as raising children or being a caregiver to aging parents. When this happens retirement savings can take a hit. That does not necessarily need to be case. You may be able to continue to save with an IRA.

If you are married you may be able to make a contribution to your IRA based on your spouse’s taxable compensation for the year. These IRA contributions are called “spousal IRA contributions.” Here are seven things to know about spousal contributions:

  1. You make your IRA contribution using your spouse’s compensation. Your spouse can still contribute to an IRA, too. In fact, if your spouse has $14,000 in taxable compensation for the year, you can both contribute $6,000 to your IRAs for 2019, plus an additional $1,000 each if you are both over the age-50 catch-up limit.
  2. Keep in mind that other IRA contribution rules still apply. You must not be 70 ½ or older in 2019 if you are contributing to a traditional IRA, and you and your spouse must have income below certain limits to make a Roth IRA contribution.
  3. You may make spousal IRA contributions in some years and regular IRA contributions in others. For example, if you have left your job to care for an aging parent you may make a spousal contribution for 2019. If you go back to work next year in 2020 and have taxable compensation, you could then make a regular contribution for 2020. Your 2019 spousal IRA contribution and your 2020 regular IRA contribution may both be made to the same IRA. There is no need to keep regular and spousal contributions in separate IRAs.
  4. You do not have to inform the IRA custodian that you are making a spousal contribution instead of a regular contribution because there is no special reporting required by the IRS.
  5. You are not required to contribute to the same type of IRA as your spouse. For example, you may choose to contribute to a traditional IRA and your spouse may contribute to a Roth IRA. You are also not required to make your contributions at the same time or with the same IRA custodian.
  6. To make a spousal contribution for 2019, you must be legally married on December 31, 2019. If you are divorced or legally separated as of that date, you are not eligible even if you may have been married earlier in the year.
  7. You must also file a joint federal income tax return for 2019.

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