By Joe Cicchinelli, IRA Technical Expert
Follow Me on Twitter: @JoeCiccEdSlott
You can’t make a traditional or Roth IRA contribution for someone who is dead. The issue comes up when someone dies, for example your spouse, and you want to make an IRA contribution for your now deceased spouse. You figure that because he/she was eligible to make the contribution when he/she was alive, you will just make it for him. You will file a joint federal income tax return for the year, and maybe even claim a tax deduction for the IRA contribution you made for your deceased spouse. Unfortunately, you are not allowed to do that.
The IRS says that IRA contributions cannot be made on behalf of a deceased person, even though that person had compensation before he died and could have made an IRA contribution. Because an IRA is for the benefit of the IRA owner, a deceased IRA owner cannot possibly benefit from an IRA contribution made for him after he died. So you as a surviving spouse or executrix of his estate cannot make an IRA contribution for him. If you do, the IRS will consider it an excess IRA contribution that will be subject to a 6% penalty each year unless it’s removed from the IRA. To avoid any penalty, you will have to remove that contribution, plus the earnings or loss on it, by October 15th of the year after the year you made the contribution for.
However, if you as the surviving spouse have little or no compensation and would like to make an IRA contribution for yourself, you can use your deceased spouse’s compensation to do that. Under the spousal IRA rules, you can use the compensation your deceased spouse earned prior to death and make an IRA contribution to your own IRA.
- IRA contributions can't be made for someone after they die
- Contributions made for deceased IRA owners are excess contributions
- A surviving spouse can use the deceased spouse's compensation to make a spousal IRA contribution for the surviving spouse's own IRA