Roth IRA Income Limits

A Roth IRA lets your money grow tax-free and come out tax-free in retirement. No required minimum distributions. No tax on withdrawals. For tech workers building wealth through RSUs and 401(k)s, it is one of the most valuable accounts available.

The catch: the IRS phases out your ability to contribute directly based on your income. Once your Modified Adjusted Gross Income (MAGI) crosses a threshold, direct Roth IRA contributions are reduced — and above a second threshold, they are eliminated entirely.

Most senior tech workers hit these limits early in their careers. Understanding where the phase-out starts, how MAGI is calculated, and what options remain above the limit is the foundation of tax-efficient retirement planning.

What Is MAGI and Why Does It Matter Here

MAGI — Modified Adjusted Gross Income — is the number the IRS uses to determine Roth IRA eligibility. It starts with your Adjusted Gross Income (AGI) from your tax return and adds back certain deductions: student loan interest, IRA deductions, foreign earned income exclusions, and a few others.

For most tech workers with W-2 income, MAGI and AGI are identical or very close. The number that matters is what appears after pre-tax deductions — your 401(k) contributions, HSA contributions, and other above-the-line deductions — reduce your MAGI and can affect your eligibility.

2026 Roth IRA Income Limits

Within the phase-out range, your maximum contribution is reduced proportionally. Above the upper threshold, direct Roth IRA contributions are not available at all — but alternatives exist.

How the Phase-Out Calculation Works

If your MAGI falls within the phase-out range, your contribution limit is reduced using this formula:

1. Calculate how far your MAGI is into the phase-out range
2. Divide that amount by the total range width ($10,000 for most filers)
3. Multiply by the full contribution limit
4. Subtract that amount from the full limit

Example: Married couple, MAGI of $247,000 in 2026. The phase-out range is $242,000–$252,000 — a $10,000 window. They are $5,000 into the range, or 50% through it. Their maximum contribution is 50% of $7,500 = $3,750 per person.

At $252,000 MAGI or above, the contribution limit reaches zero.

What Counts Toward MAGI for Roth IRA Purposes

For Roth IRA eligibility, MAGI includes:

• W-2 wages and salary
• RSU income at vest (taxed as ordinary income)
• Bonus income
• Self-employment income
• Capital gains from taxable brokerage accounts
• Dividends and interest income
• Rental income

It does not include 401(k) pre-tax contributions, HSA contributions, or traditional IRA deductions — these reduce your MAGI before the Roth eligibility calculation is applied. A tech worker with $290,000 in W-2 income who maxes out their pre-tax 401(k) ($24,500 in 2026) and HSA ($8,750 for a family) brings their MAGI down to approximately $256,750 — still above the $252,000 ceiling where direct Roth IRA contributions are eliminated entirely, making the backdoor Roth IRA the only available path.

Above the Limit: The Backdoor Roth IRA

Exceeding the Roth IRA income limit does not mean losing access to Roth accounts. The backdoor Roth IRA is the standard workaround: you make a non-deductible contribution to a traditional IRA (no income limit applies), then convert that balance to a Roth IRA.

The result is functionally identical to a direct Roth contribution — the same $7,500 (or $8,600 if you are 50+) ends up in a Roth account, growing tax-free. The strategy is legal, widely used, and explicitly acknowledged by the IRS.

The one complexity: if you hold pre-tax money in any traditional IRA, SEP IRA, or SIMPLE IRA, the pro-rata rule applies and a portion of the conversion becomes taxable. The fix is to roll pre-tax IRA balances into your current employer's 401(k) before executing the backdoor conversion.

→ For the full step-by-step process, see Backdoor Roth IRA.

The Contribution Limit Itself

Roth IRA income limits control eligibility. The contribution limit — how much you can put in — is a separate number:

• $7,500 per person in 2026 (under age 50)
• $8,600 per person in 2026 (age 50 and older — the $1,100 catch-up contribution)

These limits apply per person, not per household. A married couple can each contribute $7,500 for a combined $15,000 — as long as the contributing spouse has at least that much in earned income.

Roth IRA vs. Roth 401(k): A Note on Confusion

Roth 401(k) contributions — the after-tax option inside your employer's 401(k) plan — have no income limits. Any employee can contribute to a Roth 401(k) regardless of MAGI. This is separate from the Roth IRA income limits described on this page.

Tech workers with high income often use both: Roth 401(k) contributions during high-earning years, plus the backdoor Roth IRA for an additional $7,500 annually in tax-free growth.

How MAGI Management Affects Eligibility

For workers near the phase-out threshold, reducing MAGI can restore partial or full Roth IRA eligibility. Pre-tax contributions that lower MAGI include:

• 401(k) pre-tax contributions — up to $24,500 in 2026 ($32,500 with standard catch-up at 50+; $35,750 for ages 60–63 under SECURE 2.0)
• HSA contributions — up to $8,750 for family coverage in 2026 ($4,300 for individual coverage)
• Traditional IRA deductions — if eligible based on income and workplace plan coverage

A single filer earning $175,000 who contributes $24,500 to a pre-tax 401(k) and $4,300 to an HSA (individual coverage) brings MAGI to approximately $146,200 — below the $153,000 phase-out start, restoring full Roth IRA eligibility.