Can I Contribute to Someone Else's IRA?

An IRA can be a great way to safeguard your future. It can also be a good way to take care of someone else’s future. A gift of an IRA is possible, so long as the recipient of your generosity — or, in more practical situations, your spouse — meets the Internal Revenue Service’s qualifications to contribute.

IRA Contribution Requirements

Before you write a check to a broker to sock away cash in someone else’s IRA, you’ll need to ensure they meet the IRS’ qualifications for IRA contributions. A person needs to have earned income, such as wages or tips, before the tax man allows him to build up an IRA balance, and he can’t contribute more than he makes in a year. You’ll only be able to make your gift if the person is 70 1/2 years old or younger. Each person can only squirrel away $5,500 as of 2013, or $6,500 if they’re 50 or over, from all sources (either from you, their own earnings or another benefactor).

Tax Consequences

When you put cash into your IRA, you may be eligible to claim it as a tax deduction. The tax man won’t treat gift deductions the same way. You won’t be able to claim a deduction for the contribution. The good news? The recipient of your gift can claim a deduction as a fringe benefit to your generosity. Gifts to another person’s IRA count toward your annual gift-tax exclusion. If your IRA gift and the value of any other presents you dished out exceed your exclusion — which is $14,000 per person per year as of 2013 — you'll owe gift taxes for your generosity.


Unless you plan to hand over a check as a gift intending that it’ll be used to fund an IRA, you’ll need to gather basic information about the IRA’s recipient. You’ll need to provide a broker or bank the recipient’s Social Security number, and it’s a good idea to discuss your gift before you make it to ensure that you don’t make a gift to someone who doesn’t qualify or already made a contribution for themselves. If you make a contribution that doesn’t meet the IRS’ rules, you’ll saddle the recipient with a tax problem.


If your gift goes to someone without income or who doesn’t otherwise qualify to make a deposit to an IRA account, the IRS treats it as an excess contribution, and hands out penalties accordingly. As of 2013, excess contributions — any amount above the amount a taxpayer is qualified to contribute — are taxed at a rate of 6 percent every year that they remain in excess of their allowed limits.

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About the Author

Wilhelm Schnotz has worked as a freelance writer since 1998, covering arts and entertainment, culture and financial stories for a variety of consumer publications. His work has appeared in dozens of print titles, including "TV Guide" and "The Dallas Observer." Schnotz holds a Bachelor of Arts in journalism from Colorado State University.