Who Can Open a Roth IRA?

Roth IRAs are an option if your earned income is below the IRS limit

 Person using a calculator and laptop at a table, surrounded by paperwork

mapodile / Getty Images

Roth individual retirement arrangements, also known as Roth IRAs, allow you to contribute after-tax dollars and build a source of tax-free income in retirement. They don't provide current-year tax savings, but your contributions and earnings can grow tax-free. You can withdraw the funds tax-free and without penalty after you reach age 59½ and the account has been open for at least five years.

Most taxpayers can open and contribute to these accounts, but there are some rules in place that will exclude others. Here’s a closer look at who can open a Roth IRA, along with workarounds and alternatives if you don’t qualify. 

Key Takeaways

  • You must have earned income to contribute to a Roth IRA.
  • The amount you can invest is limited by the annual contribution limits set by the IRS. 
  • You will be further limited or ineligible to contribute to a Roth IRA if your earned income is above a certain amount.
  • Individuals without earned income may qualify for a Roth IRA through their spouses.
  • Backdoor Roth IRAs can help you work around income limitations—for the time being.

Roth IRA Earned Income Rules

One of the main requirements you must meet to make Roth IRA contributions is having earned income. Earned income includes all of the taxable income and wages you earn while working for yourself, someone else, or a business you own. 

For example, it includes wages, salaries, tips, and freelance income. On the other hand, earned income doesn’t include unemployment benefits, child support, alimony, interest, dividends, pensions, Social Security, or annuities.


If none of the money you receive is categorized as earned income, you won’t qualify to make Roth IRA contributions.  

Roth IRA Contribution Limits

When you’re ready to make a contribution to a Roth IRA, you will find you can only contribute so much. The Internal Revenue Service (IRS) sets rules each year to limit how much you can invest in all of your IRAs—not just your Roth IRA. For example, in 2022, you can only contribute up to $6,000 into IRAs if you’re 49 years old or younger. If you’re 50 or older, you can contribute up to $7,000 per year. 


If your taxable compensation for the year is less than the maximum contribution limit, you can only contribute up to the amount of earned income you’ve made. 

Once you hit the contribution limit, you’ll have to wait until the following year to make more contributions. That said, if for some reason you contribute more than the allowed amount into your Roth IRA, it will be taxed at 6% per year for each year it stays in the IRA. You can avoid the tax by withdrawing excess contributions, along with any income earned on them, by the date your individual income tax return is due the following year.

Roth IRA Income Limits

While you need earned income to qualify for Roth IRA contributions, earning too much can disqualify you. The IRS contribution limits mentioned above begin to lessen once a certain income threshold is reached, measured by your modified adjusted gross income (MAGI). 

Here’s a look at the current income limits, based on your tax filing status, and how they’ll impact the amount you can contribute:

Filing Status Modified AGI Contribution Limit
Married Filing Jointly Less than $204,000 $6,000 or $7,000, depending on age
Married Filing Jointly $204,000-$213,999 Reduced contribution limit
Married Filing Jointly $214,000 or more Not eligible
Married Filing Separately (and lived with spouse) $0 to $10,000 Reduced contribution limit
Married Filing Separately (and lived with spouse) $10,000 or more Not eligible
Single, Head of Household, Married Filing Separately (and didn't live with spouse) Less than $129,000 $6,000 or $7,000, depending on age
Single, Head of Household, Married Filing Separately (and didn't live with spouse) $129,000 to $143,999 Reduced contribution limit
Single, Head of Household, Married Filing Separately (and didn't live with spouse) $144,000 or more Not eligible
Source: IRS

If you fall into the category of having a reduced IRA contribution because of income level, you’ll need to fill out IRS Worksheet 2-2 (pictured below) to figure out how much you can contribute. 

IRS Worksheet 2-2

IRS Worksheet 2-2

Opening a Roth IRA for Your Spouse

If one spouse doesn’t have earned income but the other does and you file a joint tax return, both can open separate IRAs in their names under the spousal Roth IRA rules. Your contribution limit will then increase to either double the annual IRA contribution limit or your joint taxable income, whichever is less.

For example, if you are 45, make $175,000 per year, and your spouse doesn’t work, you could open two Roth IRAs and contribute $6,000 to each account each year, for a total of $12,000 in annual contributions. 


If your Roth IRA contribution is limited because of your income, that limit would apply to the spousal Roth IRA as well.

Backdoor Roth IRAs

While Roth IRAs exclude contributions from high earners, a backdoor Roth IRA is a legal way you can contribute through a backdoor conversion. You will first need to invest your money into a traditional IRA account and then can convert it into a Roth IRA. 


Be prepared to pay income taxes on the total amount of money you convert.

While this option is available as of the time of publication, it may not be forever. Future legislation could aim to limit the ability of high-income earners to convert their savings into Roth IRAs and Roth 401(k)s.

Alternative Retirement Investments

If you don’t qualify to contribute to a Roth IRA or would like to compare other retirement investment options, here are a few alternatives.

For one, if you’re employed and your employer offers a 401(k) plan, make sure you're taking full advantage of that account and any company matching available. Further, does your company offer Roth 401(k)s? While 401(k) distributions are subject to income taxes, Roth 401(k)s offer tax-free disbursements like Roth IRAs but don’t have any income limitations.


If you’re self-employed, some brokerage houses offer individual Roth 401(k) products you can sign up for independently. 

Second, while it’s still an option, you could open a traditional IRA and use the backdoor Roth IRA strategy to convert it. 

Further, you could consider investing in a brokerage account, which enables you to purchase a variety of investments, from stocks and bonds to exchange-traded funds (ETFs). You won’t reap tax advantages in this case, but can grow your money without worrying about contribution limits and early withdrawal penalties. 

Frequently Asked Questions (FAQs)

What are the rules for Roth IRA withdrawals?

You can withdraw your contributions from a Roth IRA account at any time without paying taxes or penalties. However, your earnings are subject to the following rules:

  • If you’re under 59½ and the account is less than five years old, withdrawals of earnings can come with a 10% early withdrawal penalty and will be subject to taxes. The penalty can be waived under certain qualifying situations, but not the taxes. 
  • If you’re under 59½ and you’ve had the account for at least five years, earnings withdrawals will be subject to taxes unless you meet one of the exceptions.
  • If you’re over 59½ but haven’t had your Roth IRA for five years yet, your earnings withdrawals will be subject to taxes but not penalties. 
  • If you’re over 59½ and have had the Roth IRA for at least five years, your earnings withdrawals won’t be subject to taxes or penalties. 

How do you set up a Roth IRA?

You can set up a Roth IRA with any institution that offers the account type, such as a bank, stockbroker, or life insurance company. Once you find the provider that best suits your needs, you’ll need to provide personal information (your name, address, Social Security number, and driver’s license number). Then, you’ll choose the type of IRA you want, verify your identity, create log-in credentials, and direct how you’ll fund the account.

Which is better, a traditional or Roth IRA?

Whether a traditional IRA or Roth IRA is better for you depends largely on when you want to pay taxes. With traditional IRAs, your contributions are tax-deductible and you pay income tax when you withdraw funds in retirement. With Roth IRAs, your contributions are made with post-tax dollars but qualified withdrawals after the age of 59½ are tax-free. You can choose also choose to have both.

Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!

Was this page helpful?
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. “Earned Income and Earned Income Tax Credit (EITC) Tables.

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

  3. IRS. “Publication 590-A (2021), Contributions to Individual Retirement Arrangements (IRAs).

  4. IRS. “IRA FAQs.”

  5. U.S. Securities and Exchange Commission. “Traditional and Roth 401(k) Plans.”

  6. Charles Schwab. “Roth IRA Withdrawal Rules."

Related Articles