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

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.

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.