There are no known issues. Your ability to deduct contributions may be reduced or eliminated depending on your MAGI, filing status, and whether you have a workplace retirement plan. Let's look at the factors to make the fully allowed deductible contribution for each of you.
- MAGI - Income of $20,000 on the NEC is the gross income. The IRA deductions look at the income available. Look at your 1040 line 11 to verify the income.
- Filing Status - covered with MFJ
- Workplace retirement plan - you must mark that your spouse is not actively participating in a retirement plan at work. There is a difference between receiving a pension versus working and contributing to your retirement plan.
Contribution allowed:
In 2024, the contribution limit for a spousal IRA is $7,000 per spouse, or $8,000 if you're 50 or older. This limit is the same as for regular IRAs.
Side note:
Making traditional IRA contributions would reduce your income and could cause a circle, with the math trying to make sense inside the program. ROTH contributions make the most sense for you since you don't have taxable income.
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