Who Can Contribute to a Roth IRA?

Learn whether you’re eligible to open and contribute to a Roth IRA

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A Roth Individual Retirement Account (IRA) is a tax-advantaged account designed for retirement savers. Roth IRAs are funded with after-tax dollars, and you can make qualified withdrawals in your retirement years without paying income taxes on them, including on their gains.

Not everyone can use a Roth IRA to save for retirement, however. The IRS determines who can contribute to a Roth IRA based on income and tax filing status. Learn who can contribute to a Roth IRA and more about annual contribution limits.

Key Takeaways

  • A Roth IRA is a tax-advantaged retirement savings account.
  • Roth IRAs are funded with after-tax dollars and allow for tax-free distributions in retirement.
  • Eligibility to contribute to a Roth IRA is based on income and tax filing status.
  • Contributing to a 401(k) plan through your employer doesn't affect your ability to save money in a Roth IRA.

Who Can Open and Contribute to a Roth IRA Account?

Generally speaking, someone needs to have compensation to open and contribute to a Roth IRA. For IRS purposes, compensation includes:

  • Wages
  • Salaries
  • Tips
  • Professional fees
  • Bonuses
  • Other amounts received for providing personal services
  • Commissions
  • Self-employment income
  • Nontaxable combat pay
  • Military differential pay
  • Taxable alimony and separate maintenance payments

Disability benefits don't count as income for Roth IRA eligibility.

Note

If you're married and your spouse works but you don't have income, you may be eligible for a spousal IRA. In this arrangement, your spouse would open a Roth IRA on your behalf and make contributions to it. However, the IRS would consider you to be the owner of the account.

The income requirement for Roth IRAs is the same as for traditional IRAs. The main difference between a Roth IRA and a traditional IRA is their tax treatment. A traditional IRA is funded with pretax dollars and contributions may be tax-deductible. But unlike a Roth, you'll pay taxes on the money when making qualified distributions in retirement.

A Roth IRA accepts contributions on income that has been taxed. When you make the withdrawals in retirement years, they are not subject to income tax. The main advantage of a Roth IRA is that the gains your investments make are also not taxed as income.

Note

Roth IRAs don't have an age limit or required minimum distributions (RMDs), so contributions can be made as long as you have eligible compensation.

How Does Your Income Affect Roth IRA Eligibility?

The IRS bases your eligibility to open and contribute to a Roth IRA on your income and tax filing status. Specifically, this is based on your modified adjusted gross income (MAGI). Your MAGI is your adjusted gross income plus any untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest.

The income limits are updated each year. If your income exceeds the allowed limit for your filing status, you can't contribute to a Roth IRA. Additionally, the amount you can contribute to a Roth IRA begins to phase out once your income exceeds certain limits.

Here's how basic income levels are set for single and married couples filing jointly for 2022.

  Single Filers Married Filing Jointly
Can contribute full amount Modified AGI of less than $129,000 Modified AGI of less than $204,000
Can contribute reduced amount Modified AGI of greater than or equal to $129,000 but less than $144,000 Modified AGI of greater than or equal to $204,000 but less than $214,000
Can’t contribute Modified AGI of greater than or equal to $144,000 Modified AGI of greater than or equal to $214,000

Your income threshold is the same as a single filer if you file as head of household or if you’re married and filing separately and did not live with your spouse the entire year.

What Else You Need To Know About Roth IRA Contributions

Aside from understanding who can contribute to a Roth IRA based on income, there are a few other things to keep in mind about these accounts.

Annual Contribution Limits

Roth IRA contributions are not unlimited. The IRS only allows you to contribute so much per year. Whether you can make the full contribution will depend on your income and filing status.

Note

For 2022, the Roth IRA contribution limit is $6,000, with an additional $1,000 catch-up contribution allowed if you're age 50 or older.

Workplace Plan Contributions

Contributing to a workplace retirement plan doesn't prevent you from saving money in a Roth IRA or affect how much you can contribute, as long as you're income-eligible. If you have a traditional IRA, on the other hand, the amount of your contributions that you can deduct is determined in part by whether you have a retirement plan through your employer.

Taxation of Distributions

Qualified withdrawals from a Roth IRA are tax-free if you're at least age 59 ½ and meet the five-year rule. This rule says your account must be open for at least five years before penalty-free withdrawals can be made.

You can also withdraw original contributions from a Roth IRA without a tax penalty. Early distributions of earnings, however, may be subject to a 10% early withdrawal penalty unless you qualify for an exception. For example, you can withdraw up to $10,000 toward the purchase of a first home penalty-free.

Excess Contributions

Making excess contributions to a Roth IRA above what's allowed for your income and failing status can result in a tax penalty. Excess contributions are subject to a 6% excise tax each year they remain in your account.

Note

To avoid the excise tax, you must withdraw excess contributions and earnings by the annual tax filing deadline.

Roth IRA Conversion

If you're not able to contribute to a Roth IRA because of your income, you have alternatives. You could do a Roth IRA conversion, which is sometimes referred to as a backdoor Roth.

With a Roth IRA conversion, you open and contribute to a traditional IRA, then roll that money over to a Roth IRA. This allows you the tax benefits of a Roth in retirement, regardless of income. Keep in mind, however, that the IRS taxes earnings on traditional IRAs that are converted.

Frequently Asked Questions (FAQs)

Can people who pay taxes but are not citizens of the U.S. contribute to a Roth IRA?

Non-citizens can contribute to U.S.-based retirement accounts, including 401(k) plans and IRAs. To qualify, you must be legally living and working in the U.S.

How long can you contribute to a Roth IRA?

There is no deadline for when Roth IRA contributions must end, as there is with traditional IRAs. Generally, you can continue contributing money to a Roth as long as you meet the IRS compensation requirement and your income doesn't exceed the allowed thresholds for your filing status.

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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. IRS. “2021 Publication 590-A.”

  2. IRS. “Retirement Topics - IRA Contribution Limits.”

  3. U.S. Centers for Medicare and Medicaid. “Modified Adjusted Gross Income (MAGI).”

  4. IRS. “Amount of Roth IRA Contributions That You Can Make for 2022.”

  5. IRS. “Traditional and Roth IRAs.”

  6. IRS. “Exceptions to Tax on Early Distributions.”

  7. IRS. “Retirement Topics.”

  8. IRS. “Foreign Persons.”

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