06 Apr My spouse doesn’t work. Can I contribute to her IRA?

Q. My spouse is not working and has no earned income. Can I contribute to her IRA using $7,000 from the sale of our house or does it have to be earned income? My income was $100,000.
— Husband

A. We’re glad you’re looking to save for your spouse’s retirement.

If you and your spouse file a joint income tax return, then you can contribute $6,000 — or $7,000 if over the age of 50 — to an IRA on behalf of your non-working spouse as long as the total contribution is not more than the taxable earned income reported in your tax return, said Deva Panambur, a fee-only planner with Sarsi, LLC in West New York and an adjunct professor of personal finance at Montclair State University.

According to the IRS, earned income “includes all the taxable income and wages you get from working for someone else, yourself or from a business or farm you own.”

Examples of earned income are wages, salary, tips, self-employment income, benefits from a union strike, certain disability benefits and nontaxable combat pay, he said. The proceeds from the sale of your house are not considered earned income.

In addition, regular rules for Roth IRA or traditional IRA apply.

“You cannot contribute to a Roth IRA if your joint income is over $214,000,” Panambur said. “You cannot deduct contributions to a traditional IRA if you or your spouse is covered by a workplace retirement plan and your combined joint income is over $129,000.”

Email your questions to .

This story was originally published on April 6, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.