The Internal Revenue Service has announced higher contribution limits for Roth Individual Retirement Accounts for the 2026 tax year. Individuals will be permitted to contribute up to $7,500, an increase from the $7,000 limit set for 2025. Those aged 50 or older can make an additional catch-up contribution of $1,100, up from $1,000 in the previous year.
Contributions can be made until the annual tax filing deadline of April 15 for the applicable year. For instance, a contribution designated for the 2025 tax year can be made as late as April 15, 2026. The maximum allowable contribution is the lesser of the stated limit or the individual's total earned income for the year.
Eligibility to contribute directly to a Roth IRA is subject to income limits. For the 2026 tax year, single filers and heads of household with a modified adjusted gross income below $153,000 can make a full contribution. A reduced contribution is allowed for incomes between $153,000 and $168,000, while those earning $168,000 or more are prohibited from direct contributions.
For married couples filing jointly, the full contribution is available with a modified adjusted gross income under $242,000. A phased reduction applies for incomes between $242,000 and $252,000, and contributions are not allowed above $252,000. These limits are adjusted annually for inflation.
A key feature of the Roth IRA is its tax treatment. Contributions are made with after-tax dollars, and qualified withdrawals taken at age 59½ or later are entirely tax-free. This includes all investment earnings accrued within the account. However, a five-year holding period must be satisfied from the date of the first contribution before earnings can be withdrawn tax-free.
Account holders may withdraw their original contributions at any time without taxes or penalties. Early withdrawals of investment earnings before age 59½ typically incur income taxes and a 10% penalty, though exceptions exist for qualified expenses such as higher education.
The account requires the account holder to have earned income. An exception exists for spousal IRAs, allowing a working spouse to fund an IRA for a non-working spouse, provided their combined contributions do not exceed the working spouse's total annual income.
Funds from an employer-sponsored Roth 401(k) plan can be rolled over into a Roth IRA without creating a tax liability. However, any employer-matched funds held in a traditional 401(k) would be subject to tax if rolled into a Roth IRA.
Individuals whose income exceeds the limits for direct contributions may utilize a backdoor Roth IRA strategy. There are no age restrictions for contributing to a Roth IRA, and the accounts are not subject to required minimum distributions during the original owner's lifetime.