4.8 Traditional and Roth IRA Contribution Rules

Contributions are different from rollovers and conversions

An individual retirement arrangement (IRA) can receive an annual contribution, a rollover, or a conversion. These transactions have different eligibility and dollar-limit rules. A counselor should classify the transaction before choosing a limit or deciding whether income is taxable. A large employer-plan rollover is not an excess annual IRA contribution merely because it exceeds the contribution ceiling.

For 2026, the combined annual contribution limit across a person's traditional and Roth IRAs is $7,500, plus a $1,100 catch-up if age 50 or older by year-end. Contributions also cannot exceed eligible compensation, subject to the spousal-IRA rule on a joint return. A 58-year-old with sufficient compensation may therefore contribute $8,600 in total, not $8,600 to each account type.

Compensation and timing

Wages and qualifying net self-employment income generally support contributions. Interest, dividends, capital gains, pension payments, and ordinary Social Security retirement benefits generally do not. A retiree with substantial investment income but no compensation cannot assume that wealth alone makes them eligible for a new annual contribution.

There is no maximum age for otherwise eligible traditional IRA contributions. Contributions for a tax year generally can be made through the return's normal filing deadline, excluding extensions. Specify the intended tax year when depositing between January and that deadline. The calendar date of a deposit and its designated contribution year may differ.

On a joint return, a working spouse's compensation can support contributions to separate IRAs for both spouses, subject to the combined compensation limit. This is not a joint IRA. Each spouse owns their own account and receives their own age-based catch-up if eligible.

Traditional IRA eligibility versus deductibility

A traditional contribution can be permitted even when it is not deductible. Employer-plan participation and modified AGI determine whether an otherwise eligible taxpayer can deduct it. If neither spouse is covered by an employer retirement plan, the employer-coverage phaseout generally does not limit the deduction.

For 2026, a covered single or head-of-household taxpayer's deduction phases out from $81,000 to $91,000 of modified AGI. For a covered contributor filing jointly, the range is $129,000 to $149,000. A contributor not covered by an employer plan but married to a covered spouse uses $242,000 to $252,000. A married-filing-separately taxpayer who lived with the spouse generally faces the restrictive $0–$10,000 range.

Use the IRS worksheet within the phaseout instead of treating the lower threshold as a complete bar. Modified AGI is defined for this purpose; it is not necessarily the same as Medicare IRMAA MAGI or the number used for a different tax benefit.

Roth contribution income restrictions

Roth contributions are not deductible. Their 2026 phaseout is $153,000 to $168,000 for single/head-of-household taxpayers and $242,000 to $252,000 for joint filers. Married-filing-separately taxpayers who lived together generally use the $0–$10,000 range. Do not apply these direct-contribution income limits to a Roth conversion.

For example, a 60-year-old single taxpayer with $180,000 of Roth-purpose modified AGI cannot make a direct 2026 Roth IRA contribution. They may still be eligible for a nondeductible traditional contribution if compensation supports it, and may consider a conversion. The latter requires a pro-rata analysis of all relevant owned traditional, SEP, and SIMPLE IRA balances and basis.

Basis and excess contributions

A nondeductible traditional contribution creates basis tracked on Form 8606. Tax deferral on future earnings is different from deductibility of the contribution. Losing the Form 8606 record can cause tax to be paid twice if distributions are incorrectly treated as entirely pre-tax.

The basis belongs to the combined IRA tax calculation; the owner cannot select only a particular after-tax dollar to convert while ignoring a large pre-tax rollover IRA elsewhere. Keep year-end statements and current-year distribution records. Roth contribution basis and conversion basis follow different distribution-ordering rules, explained in the conversion section.

An excess contribution can result from exceeding compensation, the annual combined limit, or the applicable Roth income limit. An uncorrected excess generally faces a recurring 6% excise tax while it remains, subject to the statutory calculation. A timely corrective distribution includes attributable earnings. A recharacterization can change an eligible contribution's account treatment, but it cannot undo a completed Roth conversion under current law.

Choosing an account in a retirement plan

Compare the contribution deduction available today with future distribution taxation, liquidity, beneficiary goals, and expected tax rates. “Traditional” does not mean every contribution is deductible, and “Roth” does not mean every possible withdrawal is immediately qualified. Higher expected future rates can favor Roth treatment; a valuable present deduction and lower future rates can favor traditional treatment.

Document the year, age, compensation, filing status, plan coverage, modified AGI, contributions already made, and existing basis before recommending a deposit. This small checklist catches most eligibility errors before the custodian receives money.

Checked October 19, 2026: IRS 2026 IRA and retirement limits and Publication 590-A.

Decision checkpoints