Who Can Contribute to a Roth IRA? Eligibility Rules
Understand the specific IRS regulations that determine who can contribute to a Roth IRA and how much. Your eligibility depends on key personal financial factors.
A Roth Individual Retirement Arrangement (IRA) is a retirement savings account allowing for tax-free growth and withdrawals in retirement, with contributions made from money that has already been taxed. The Internal Revenue Service (IRS) sets specific eligibility rules for contributing to a Roth IRA. These regulations are based on factors like income that can change annually.
The Earned Income Requirement
A primary rule for contributing to a Roth IRA is the earned income requirement. An individual must have taxable compensation to be eligible to contribute for a given year. The amount you can contribute is limited to your total compensation for the year or the maximum annual contribution limit, whichever is less.
The IRS defines compensation for IRA purposes. Qualifying income includes wages, salaries, tips, commissions, bonuses, and self-employment income. Income that does not qualify includes things like rental income from property, interest and dividend income, pension or annuity income, and unemployment benefits.
There are no age limits for contributing to a Roth IRA. A minor with a part-time job can contribute, just as a person in their 70s who is still working can. The determining factor is the presence of earned income, not age.
Income and Filing Status Limitations
Your ability to contribute to a Roth IRA is also tied to your income level and tax filing status. The IRS sets income thresholds that determine if you can make a full, partial, or no contribution. These limits are based on your Modified Adjusted Gross Income (MAGI), which is your Adjusted Gross Income (AGI) with certain deductions added back.
For 2025, a single filer or head of household can make a full contribution with a MAGI below $150,000. Contributions are phased out for a MAGI between $150,000 and $165,000 and are disallowed above that. For those married and filing a joint tax return, the limits are higher. They can make a full contribution with a MAGI below $236,000, with the phase-out range between $236,000 and $246,000.
The rules are more restrictive for individuals who are married but file separately. If you lived with your spouse at any point during the year, your ability to contribute phases out with a MAGI between $0 and $10,000 and is disallowed entirely above that amount. These limits are designed to prevent couples from circumventing the income limitations for joint filers.
Annual Contribution Limits
There is a maximum amount you can contribute to a Roth IRA each year. For the 2024 and 2025 tax years, the maximum annual contribution is $7,000. This limit is set by the IRS and can be adjusted periodically for inflation.
The tax code allows for “catch-up” contributions for those age 50 and over. For 2024 and 2025, these individuals can contribute an additional $1,000 per year. This brings their total potential contribution to $8,000 for the year.
This annual limit applies to all of your IRAs combined, including both Roth and Traditional. You cannot contribute the maximum amount to both types of accounts in the same year. For example, if you are under 50, you can contribute a total of $7,000 across all your IRA accounts, such as $4,000 to a Roth IRA and $3,000 to a Traditional IRA.
Addressing Special Circumstances
Certain situations create exceptions to the standard contribution rules. One common exception is the spousal IRA, which provides a way for a spouse with little or no earned income to save for retirement.
To qualify for a spousal Roth IRA, the couple must file a joint tax return. The working spouse must have enough earned income to cover their own IRA contribution as well as the contribution for their spouse. For instance, if both spouses are under 50, the earning spouse needs at least $14,000 in compensation to contribute the maximum of $7,000 to each of their accounts for 2024 or 2025.
Making an excess contribution occurs if you contribute more than the annual limit or contribute when your MAGI is above the allowed threshold. These excess contributions are subject to a 6% excise tax for each year they remain in the account. This penalty is reported using IRS Form 5329. To avoid the penalty, the excess amount plus any earnings must be withdrawn by the tax filing deadline.