How Income Shrinks a Roth Contribution
Roth IRA contributions are restricted by income, which is the only one of the retirement accounts to work that way. Above a threshold the allowed contribution reduces across a band and then reaches zero. People treat the first threshold as a wall and stop contributing entirely, when a partial contribution is frequently still available — and where it is not, the money still has somewhere to go.
- Modified AGI is the measure:: Not gross salary, and not taxable income — a specific figure computed for this test.
- A band, not a cliff:: The contribution reduces proportionally across the band rather than stopping at the first threshold.
- Filing status sets the thresholds:: Separate bands apply to single, married filing jointly, and married filing separately.
- Above the band, other routes remain:: A non-deductible traditional contribution and a workplace Roth are unaffected by these limits.
Where the AI summary above gets this wrong
"If you earn too much, you cannot put money in a Roth."
That's surface-true. Here's what it misses:
- Direct contributions stop; Roth money does not — The income limit applies to contributing straight into a Roth IRA. A Roth 401(k) at work has no income limit at all, and a non-deductible contribution followed by a conversion reaches the same destination. The door people believe is closed is one of three.
- The reduction is gradual — Crossing the first threshold does not end the contribution — it reduces it in proportion to how far into the band the income sits. Someone a third of the way through may still contribute roughly two-thirds of the full amount, and stopping entirely leaves that room unused.
- Married filing separately has its own, much lower band — Where a couple files separately and lived together at any point in the year, the phase-out band starts at zero and is very narrow. That surprises couples who separate filing status for another reason and lose the Roth contribution as a side effect.
01 The income figure being tested
The test uses modified adjusted gross income, which starts from adjusted gross income and adds back a specific list of items. For most households it is close to adjusted gross income, and the difference matters only where one of those items is present.
Because it is measured for the whole year, a contribution made in January is provisional until December. A bonus, a large realised gain or a Roth conversion can push the figure past the threshold after the contribution has already been made.
Where that happens the contribution becomes an excess, with its own correction rules and a deadline. Contributing after the year's income is known avoids the problem entirely.
Shows: the reduced Roth contribution allowed part way through the phase-out band, before the rounding the published worksheet applies. Ignores: the rounding up to the nearest ten dollars, the floor that keeps a small contribution available near the top of the band, and the traditional IRA deduction rules, which use different thresholds.
Source: Roth IRAs
02 How the phase-out reduces the amount
Between the lower and upper thresholds the allowed contribution falls in proportion to how far income has travelled through the band. A quarter of the way in leaves roughly three-quarters of the full contribution available.
The published worksheet rounds the result up to the nearest ten dollars and keeps a small minimum contribution available until income passes the top of the band entirely, so the exact figure is slightly more generous than a straight proportion.
The thresholds themselves depend on filing status and are adjusted each year, so last year's numbers are not this year's. The structure stays the same even as the figures move.
Source: Publication 590-A: Contributions to individual retirement arrangements
03 What remains above the band
The combined annual IRA limit is unchanged by income — only the Roth share of it is restricted. A contribution to a traditional IRA is always permitted where there is earned income, though its deductibility is separately limited for someone covered by a workplace plan.
A workplace Roth account has no income limit, so a high earner with a Roth 401(k) can save far more into Roth treatment than the IRA rules would ever have allowed. That is the first place to look, ahead of anything clever.
Beyond that, a non-deductible traditional contribution converted afterwards produces Roth money without an income test — the route set out in the larger version of the same idea. Both depend on tracking basis properly on the return.
Two things get people here. The first is treating the lower threshold as the end of the road when a partial contribution is still on the table — check the worksheet before you give up. The second is contributing in January and finding out in April that the year came in high. If your income is anywhere near the band, contribute once you know the year's number rather than at the start of it. You lose a few months of growth and avoid a correction.
FAQ
What income stops me contributing to a Roth IRA?
Modified adjusted gross income above the upper threshold for your filing status. Between the lower and upper thresholds a reduced contribution is still allowed.
Can I still get money into a Roth if I earn too much?
Yes. A Roth 401(k) at work has no income limit, and a non-deductible traditional contribution can be converted afterwards. The limit applies only to contributing directly to a Roth IRA.
What happens if my income turns out higher than expected?
The contribution becomes an excess. Removing it with its earnings by the return's due date including extensions, or recharacterising it, corrects it without an excise tax.
Sources
Regulator references
- Roth IRAs · Internal Revenue Service · 2026Who may contribute and how the income phase-out works.Last verified: 2026-09-07
- Retirement topics: IRA contribution limits · Internal Revenue Service · 2026The combined annual limit the phase-out reduces.Last verified: 2026-09-07
- Publication 590-A: Contributions to individual retirement arrangements · Internal Revenue Service · 2026The worksheet for a reduced contribution inside the phase-out band.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.