2022-2023 Roth IRA Qualifications: Are You Eligible to Open a Roth IRA?

Roth IRAs are an easy, flexible way to save for retirement, but certain rules apply. Here's what you need to know to open a Roth IRA.
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Opening a Roth IRA is easy, but you must meet two specific eligibility requirements.

Roth IRA Qualifications:

  • You must have earned income.
  • Your earnings must fall within Roth IRA income limits.
  • Open your IRA through an approved IRA custodian, like a bank or brokerage firm.
  • Contribute to your Roth IRA before the contribution deadline.

Rules aside, Roth IRAs are an easy, flexible way to save for retirement. Here’s what you need to know to open one.

Earned Income Requirements for Roth IRA Contributions

You must have earned income to be eligible to open a Roth IRA.

Earned income includes all income from your salary, wages, services provided, professional fees, tips, commissions, profit sharing and bonuses. Forms of payment that don’t qualify as earned income include interest, dividends, royalties, rental income, capital gains, disability, social security income, or income from annuities.

Earned income includes any money you worked to receive. Family gifts and other income that doesn’t require work may not count as earned income. You must pay taxes on earned income, except when:

  • You’re deployed to a tax-free combat zone
  • You’re an overseas contractor who qualifies for the foreign earned income exclusion (FEIE)

While overseas contractors who exclude all their income from federal taxes aren’t eligible to open a Roth IRA, deployed military members can contribute to an IRA or other retirement account under The HEROES Act.

Why Military Members Should Open Roth IRAs

Contributing your tax-free combat to a Roth TSP or Roth IRA allows your money to grow tax-free. You won’t pay taxes when you contribute or when you withdraw.

Read more about investing while deployed.

Income Limits for Roth IRA Contributions

To contribute to a Roth IRA, your earned income must fall within IRS Roth IRA income limits.

You can’t contribute to a Roth IRA if you earn above a certain threshold. However, you may be able to contribute to a traditional or nondeductible IRA now and do a Roth IRA conversion later. This is called a Backdoor Roth IRA or Roth IRA conversion.

IRS income limits apply to your modified adjusted gross income (MAGI), found on your IRS Form 1040.

Here are the Roth IRA income limits for the 2022-2023 tax years:

Single or Head of Household:

  • Full Contribution:
    • MAGI below $129,000 in 2022
    • MAGI below $138,000 in 2023
  • Partial Contribution(Phase-Out):
    • MAGI between $129,000 and $144,000 in 2022
    • MAGI between $138,000 and $153,000 in 2023
  • No Contribution (Ineligible):
    • MAGI above $144,000 in 2022
    • MAGI above $153,000 in 2023.

Married Filing Jointly:

  • Full Contribution:
    • MAGI below $204,000 in 2022
    • MAGI below $218,000 in 2023
  • Partial Contribution(Phase-Out):
    • MAGI between $204,000 and $214,000 in 2022
    • MAGI between $218,000 and $228,000 in 2023
  • No Contribution (Ineligible):
    • MAGI above $214,000 in 2022
    • MAGI above $228,000 in 2023.

What Is a Phase-Out Limit?

If your income falls within the IRS phase-out range, you can only contribute a portion of the maximum annual contribution limit.

Here’s a chart showing what these Roth IRA phase-out limits look like in 2023:

Filing StatusModified AGI Allowable Contribution
Married filing jointly or qualifying widow(er)$218,000 or lessUp to the annual contribution limit
More than $218,000 but less than $228,000Partial amount
$228,000 or moreNo contribution
Married filing separately and you lived with your spouse at any time during the yearLess than $10,000Reduced amount
$10,000 or moreNo contribution
Single, head of household or married filing separately and you did not live with your spouse at any time during the year$138,000 or lessNo contribution
More than $138,000 but less than $153,000Partial contribution
$153,000 or moreNo contribution

Roth IRA Contribution Limits and Deadlines

IRS rules determine how much you can contribute to an IRA each year and when you can make contributions for each tax year.

Contribution Limits

If you’re under age 50, you can contribute $6,500 to your Roth IRA in 2023 (up from $6,000 in 2022). If you’re at least 50 years old, you can make a catch-up contribution of an additional $1,000, for a total of $7,500 in 2023 (up from $7,000 in 2022).

Contribution limits apply to Roth and Traditional IRAs. You can contribute to both, but the sum of your contributions cannot exceed the annual limit.

Here’s a table showing each year’s IRA contribution limit since 2002.

Tax YearContribution Limit
Age 49 or Younger
Catch-Up Contribution
Limit Age 50 or Older
Contribution Limit
Age 50 or Older
2019 - 2022$6,000$1,000$7,000
2013 - 2018$5,500$1,000$6,500
2008 - 2012$5,000$1,000$6,000
2006 - 2007$4,000$1,000$5,000
2002 - 2004$3,000$500$3,500

Contribution Deadlines

IRA contribution limits apply to each year. You can contribute to a Roth IRA as soon as the calendar year changes, but you must make all that year’s contributions by the tax filing deadline in April.

You cannot make additional contributions later to compensate for lost time in a previous year or extend the IRA contribution deadline if you need to file a tax extension.

Open Roth IRA at an Approved Institution

The IRS offers unique tax benefits for opening a Roth IRA, which must be correctly coded, managed, and tracked for tax reasons. So, you must open a Roth IRA at an IRS-approved financial institution.

Many brokerages, banks, credit unions, savings and loan associations, financial planners and FDIC-insured financial institutions qualify as IRS-approved financial institutions. Here are some top Roth IRA companies to consider.

Once you’ve chosen an IRS-approved institution, you can open an IRA within 30 minutes by submitting a few forms.

What to Do If You Don’t Qualify for a Roth IRA

If you don’t qualify for a Roth IRA, you may still be eligible to contribute to another IRA and convert it to a Roth IRA later.

For example, if you meet all the Roth IRA qualifications except income limits, you may be eligible to contribute to a nondeductible IRA.

A nondeductible IRA is a Traditional IRA that isn’t tax deductible. You can convert a nondeductible IRA into a Roth IRA later. However, several requirements apply. For example, you may have to account for your gains when you convert. If you’re planning to convert an IRA, consult a tax professional or fee-only investment advisor to avoid penalties and minimize taxes.

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  1. Rea says

    Trying to figure out if a military retirement is calculated as part of the AGI.
    Both my husband and I work full time, plus we get a military pension. Are all 3 consider for the AGI, for IRA contributions?

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