Retirement tax questions

This should be working for you. I tested the functionality of spousal IRA contributions in TurboTax Home and Business Desktop, and did not have any issues. With a test taxpayer earning $78,000 in W-2 wages filing jointly with their stay-at-home spouse who had $0 income (compensation or other type), the employed taxpayer was able to contribute their maximum $7,000 to a Traditional IRA, and the low/no-income spouse was also able to contribute the maximum $7,000 to a traditional (“spousal”) IRA without triggering the creation of Form 5329 or the 6% tax on excess contributions.

To verify your entries: if you’re the income-earning taxpayer, do not enter the total combined IRA contributions (i.e. $14,000 per above) when asked about your contributions for the year; 

• Instead, separately enter the amount contributed to your own traditional IRA account when asked about your contributions, and then select Continue to enter the contribution amount to your spouse’s traditional IRA when asked next. 
• For both options to appear, check the checkboxes for both taxpayers as having a Traditional IRA and/or Roth IRA on the initial screen titled,  “Tell us about your IRAs / Select the kinds of IRAs owned or contributed to for 2025.”

Otherwise, you can troubleshoot the contribution limitation in TurboTax Desktop by selecting Forms in the upper right > Forms in My Return, on the left > IRA Contrib Wks - to review and edit the IRA Contributions Worksheet directly. 
 

@saunder1 Is there a more specific screen or tax form / worksheet where you are seeing the excess contribution tax being added, and is there a specific error message you can share? 

I understand you are aware of your ineligibility for an IRA contribution deduction, and that this question refers to taxes from Sec. 219(c) Kay Bailey Hutchinson spousal IRA contribution limits. Note, to qualify for a spousal IRA contribution: 

1. You must file a joint tax return - 219(c)(2)(A)
2. Your taxable compensation is less than that of your spouse - 219(c)(2)(B) 

Then, the limit for annual contributions to your spousal IRA is the smaller of:

1. $7,000 ($8,000 if over 50) 
2. The total compensation includible in the gross income of both you and your spouse for the year minus your spouse's Traditional IRA contribution for the year minus your spouse’s Roth IRA contributions (from any source) for the year

If you made excess IRA contributions in 2025, you may still have time to make a correction. Learn more:

TurboTax - What if I made an excess Roth IRA contribution because my income is too high?

TurboTax - How do I know if I contributed too much to my traditional IRA?

IRS Pub. 590-A (2025) - Contributions to Individual Retirement Arrangements (IRAs)