IRA Contributions

Any individual with earned income may make new contributions to a traditional IRA — there is no age limit. The maximum annual contribution to a traditional IRA is the lesser of:

• $7,500 (2026 limit; indexed annually for inflation), or
• 100% of earned compensation

Taxpayers age 50 and older may contribute an additional $1,100 (2026) as a “catch-up” provision, intended to help those approaching retirement age make up for missed contributions in earlier years.

Note: The following examples and discussion assume the IRA participant is under age 50 unless otherwise indicated.

The annual limits apply to new IRA contributions only. There are no limits on amounts rolled over into an IRA from another qualified plan or transferred trustee-to-trustee. Individuals may hold more than one IRA account; however, the annual limit applies to the total new contributions made to all IRAs for the year. Opening additional IRAs does not increase the contribution limit.

The tax code limits the amount that may be contributed but does not require an individual to contribute to an IRA. However, if a person does not contribute the maximum in a given year, they may not make up the difference with excess contributions in subsequent years.

If an individual contributes more than is permitted, the excess is subject to a 6% excise tax. This tax is cumulative. The excess contribution (and any earnings generated by it) should be withdrawn by that year’s tax filing date (usually April 15th of the following year). If not, the 6% tax applies each year the excess remains in the account until it is “corrected.” Excess contributions in the past may be corrected by underfunding the account in the future. Previous under-fundings cannot be used to correct a current excess.

An individual who invests in an annuity or endowment contract under an individual retirement annuity cannot contribute more than the annual contribution limit toward its cost for the tax year, including the cost of life insurance coverage. (For more on Individual Retirement Annuity Contracts →)

Contributions to an IRA generally must be in the form of “cash,” which includes checks, money orders, wire transfers, and even credit cards. An IRA contribution made by credit card advance is acceptable as long as the bank honors the charge. It is not necessary for the taxpayer to repay the credit card advance before the due date of the year’s tax return.

Because new IRA contributions must be made in the form of cash, contributions of property — such as stock or bonds — to an IRA are not allowed. Of course, the IRA custodian may use the cash contribution to purchase securities requested by a self-directed IRA owner. Securities may also be rolled over or transferred to an IRA from an existing qualified plan or another IRA.

IRA owners may make contributions for a tax year at any time during the year or by the normal filing date for that tax year. The deadline for IRA contributions is not extended by any filing extensions. For most people, contributions must be made by April 15 of the year following the relevant tax year. Contributors may rely on a postmark to prove timely contributions sent by mail. An electronic transfer is treated as a cash contribution on the date that payment and registration instructions are received by the custodian or its agent.

Since there is a delay between the close of the tax year and the filing date, IRA owners who contribute between January 1 and April 15 must indicate the year for which the contribution is being made. If the IRA owner does not notify the sponsor as required, the sponsor must assume that the contribution is for the tax year in which the contribution is made.

A taxpayer can file a tax return claiming an IRA contribution before actually making the contribution. However, the taxpayer must then contribute to an IRA by the due date of the return.

Similarly, taxpayers who file early and did not claim a deduction for IRA contributions may file amended returns to reflect subsequent contributions made before the April 15th filing deadline. Upon filing the amended return, the taxpayer is entitled to a refund for the overpayment of taxes.

Spousal IRAs are available to married couples who file a joint return, and one spouse has no earned income or has less income than the other spouse. The maximum contribution made to IRA accounts covering both a working and non-working spouse is limited to the lesser of:

• 100% of the combined compensation of both spouses, or
• $15,000 in 2026 ($7,500 per spouse; $8,600 per spouse if age 50 or older)

Contributions are permitted to spousal IRAs for the benefit of either spouse as long as the couple has sufficient combined earned income and files jointly. There is no age restriction on contributions to spousal IRAs.

Non-spouse beneficiaries who inherit an IRA may not make new contributions into the inherited account. They may contribute to their own IRAs, but not the inherited account. Surviving spouses who inherit an IRA may make additional annual contributions to the inherited account.