Can DACA Recipients Open a Roth IRA?
DACA recipients can open a Roth IRA. Understand the eligibility requirements and practical steps to start building your retirement savings.
Deferred Action for Childhood Arrivals (DACA) is a program offering protection from deportation and work authorization to eligible individuals who arrived in the United States as children. A Roth Individual Retirement Account (IRA) is a retirement savings vehicle allowing after-tax contributions to grow tax-free, with qualified withdrawals also being tax-free in retirement. This article clarifies whether DACA recipients can open and contribute to a Roth IRA.
Understanding Roth IRA Eligibility
Contributing to a Roth IRA requires earned income, which includes taxable wages, salaries, tips, bonuses, commissions, and net earnings from self-employment. Income from sources like rental properties, interest, dividends, or capital gains does not qualify as earned income for Roth IRA contributions.
The Internal Revenue Service (IRS) outlines Modified Adjusted Gross Income (MAGI) limits that determine contribution amounts. For 2025, single filers can make a full Roth IRA contribution if their MAGI is less than $150,000, while married individuals filing jointly can contribute fully if their MAGI is below $236,000. Contributions are phased out for incomes above these thresholds, with complete ineligibility at higher MAGI levels. The maximum annual contribution for 2025 is $7,000, with an additional $1,000 catch-up contribution allowed for individuals age 50 and older.
To open any financial account, including a Roth IRA, individuals need to provide identification. This includes a valid government-issued photo ID, such as a driver’s license, state ID, or passport. A Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) is also required. Proof of address, such as a utility bill or lease agreement, is common.
How DACA Status Affects Eligibility
DACA status provides recipients with employment authorization in the United States. This authorization allows DACA recipients to legally work and earn income. Since earned income is a requirement for contributing to a Roth IRA, DACA recipients who are employed and receive taxable compensation meet this criterion.
Individuals granted DACA status and an Employment Authorization Document (EAD) are eligible to apply for a Social Security Number (SSN). The SSN serves as the primary identification number for tax and financial accounts in the U.S. Therefore, DACA recipients can satisfy the SSN requirement for Roth IRA eligibility, enabling them to engage with financial institutions.
DACA status itself does not create separate eligibility rules for Roth IRAs. Instead, it provides the legal framework—specifically work authorization and SSN eligibility—that allows recipients to meet standard Roth IRA requirements. DACA recipients must still adhere to the same MAGI limits and earned income rules as any other Roth IRA contributor.
Opening Your Roth IRA
Once eligibility is confirmed, opening a Roth IRA involves several steps. The first step is to choose a financial institution, which could be a brokerage firm, bank, or credit union. Many institutions offer Roth IRA accounts, and comparing their investment options, fees, and customer service is beneficial.
After selecting an institution, you will need to complete an account application. This process requires providing your personal details, including your full legal name, date of birth, and current address. You will also need to furnish the necessary identification documents. Finally, you will need to fund the account, often with an initial deposit, which can be transferred from a checking or savings account.