A Daily Network publication
Explore the network
Wealth Advisor Daily
The advisor's edition — practice, portfolio, and the book.
Tuesday, October 6, 2026The Morning Brief →Sign in
The Book

A spouse's 401(k) can quietly end the IRA deduction

In 2026, the traditional IRA deduction for an uncovered spouse phases out between $242,000 and $252,000 of modified adjusted gross income. Box 13 on the W-2 decides who qualifies.

Sarah Brenner, a retirement educator at Ed Slott IRAHelp, lays out the 2026 rules. For an uncovered spouse, the traditional IRA deduction begins to phase out at $242,000 of modified adjusted gross income. It is gone once income passes $252,000. The ceiling is roughly $100,000 above the range that applies when both spouses are active participants in workplace plans. That range runs from $129,000 to $149,000.

When neither spouse is an active participant in a 401(k), SEP, or SIMPLE, both can deduct traditional IRA contributions. A single filer without a plan can do the same. When one spouse is covered, the covered spouse uses the lower phase-out band and the uncovered spouse uses the higher one. Income above $252,000 eliminates the deduction for the uncovered spouse. Roth IRA contributions never carry a deduction.

The Box 13 test

Brenner points to Box 13 on the W-2 as the usual evidence of coverage, and she warns that employers occasionally mark it by mistake. A clean box is only the first test. The uncovered spouse's deduction still depends on the covered spouse's plan and the household's modified adjusted gross income.

Her example: Uma has a 401(k); Josh's employer offers no plan. At $300,000 of household income, Josh cannot deduct any traditional IRA contribution, and Uma cannot either.

Social Security's 78% projection and the proposed $10 million balance cap will make the 2026 retirement headlines. The phase-out table is what decides a specific client's deduction. The desk test is cheap: collect both W-2s, read Box 13, and place the household on the income table before recommending a contribution.

Continue your research

Save this analysis and keep the funds you follow together in My Desk.

Sign in to save articles or follow funds.
More from Wealth Advisor Daily
The Book

SEC, FINRA, CFTC, NASAA, NFA and SIPC issue a joint investor bulletin

The bulletin pairs market-volatility planning with warnings that AI is making impersonation scams harder to detect and directs investors to registration checks.
The Book

Coastal 360 and Sovereign Financial use projections to show wealthy retirees they can spend

Alicia Fuller and Charles Failla walk clients through cash-flow projections before spending; one preceded a $150,000 world trip.
The Advisor's Note

Ensemble survey: RIAs above $1B lost 4.3% of clients in 2023, below $500M 1.4%

Philip Palaveev ties the 2.9-point gap to client-service employees who hold no equity stake.
Elsewhere in the networkAll titles →
Every weekday · 6:30 a.m. ET

The Morning Brief

The latest from Wealth Advisor Daily, in your inbox every weekday. Free.