Hi Turbo tax says I am not eligible for IRA deduction since limit for couples is 125k but reading online I find limit at 198k if one spouse does not have retirement plan.

Yes, this is correct if your spouse had no retirement plan at work but you do then your spouse's traditional IRA contribution will be 100% deductible if your MAGI is less than $198,000.  Your deduction will be limited starting at $105,000 since you have a retirement plan at work.  Please see IRA deduction limits for details.

Please make sure that the box 13 retirement isn't checked on your spouse's W-2:

1. Click on "Search" on the top right and type “W-2” 
2. Click on “Jump to W-2”

Another location to check is during the IRA contribution interview. Please make sure you select "no" for you when TurboTax asks if your spouse had a retirement plan at work:

1. Click on "Search" on the top right and type “IRA contributions” 
2. Click on “Jump to IRA contributions"
3. Select “traditional IRA”
4. On the "Retirement Plan Coverage?" screen (for you) answer "Yes" 
5. On the "Retirement Plan Coverage?" screen (for spouse) answer "No" 

[Edited 4/92022 | 7:31am PST]

@Harry3 

The $198k to $208k phase-out range for 2021 applies to the spouse that is not covered by a workplace retirement plan.  The spouse that is covered is subject to the $105 to $125k phase-out range.