Spousal IRA contribution while getting RMD

[pfrivera]

Hello,

Can I contribute to my wife's IRA even if she is getting Required Minimum Distributions?

I worked in 2021 and made enough to cover the 14K  for our two contributions. 

She withdrew ~10K in RMDs and sees as odd that now she can contribute 7,000 to that same account.

Turbo Tax is telling me that I can and I have seen a post here that says that I can. But I need a direct reply to my situation to convince her that we can or, if not, set me straight.

I also retired in May 2021 and have a pension. She has no pension.

Thank you so much.

[MinhT1]

Yes.

If you have enough earned income, your wife can contribute to a Spousal IRA even if she is taking RMDs.

In fact, the SECURE Act has removed the age cap for contributing to a Traditional IRA.

Please read this IRS document for more information.

[bjlemmon]

We decided to make a contribution into our IRA this year because it will save us payment to the IRS on our return.  On the TurboTax 2022 tax form...one of the questions is "Is this contribution a repayment into the ira account.  Do I say "yes".  (we had to take the RMD this year)

[AbrahamT]

Say yes. The amount that you enter towards your IRA contribution will serve as a deduction from the taxes that would otherwise have to pay on that distribution. It will considered a rollover to the IRA account and will "NOT" trigger a taxable event. See HERE.

[bjlemmon]

Hi Abraham...were you answer my question...We decided to make a contribution into our IRA this year because it will save us payment to the IRS on our return. On the TurboTax 2022 tax form...one of the questions is "Is this contribution a repayment into the ira account. Do I say "yes". (we had to take the RMD this year)

Thanks

[fanfare]

the "EXPERT" answer is wrong.

you cannot rollover an RMD to another IRA or the same IRA.

if you pay it back, you will have failed to take the required amount.

if you have compensation enter the contribution under IRA contributions.

@bjlemmon 

P.S. you will be happier with your retirement money in a Roth IRA rather than a Traditional IRA.

That's my advice.

[Opus 17]

@bjlemmon 

A new contribution is a new contribution. Do not report that it was a rollover or a return of a previous withdrawal, or anything else.

You can only make new contributions to your IRA if you or your spouse have compensation from working.  Compensation generally means, box 1 W-2 wages, or self-employment income on schedule C, although there are a few minor additional items.