Calculating the MAGI to be Eligible for Roth IRA Contributions

Calculating the MAGI to be eligible for Roth contributions is one of the most common misunderstandings we see when tax planning with our clients.

One confusing part of our tax code is that the term MAGI, or modified adjusted gross income, has many different calculations and definitions. This video covers how to calculate your MAGI that determines if you are eligible to make Roth IRA contributions.

How to Calculate MAGI for Roth IRA Contributions

There are many tax deductions, credits, benefits, and surcharges that may be available to you (or imposed on you) depending on your MAGI.

Some are valuable tax credits for families with college-age children, like the American Opportunity Credit.

Some are added taxes, like the Net Investment Income Tax or the Medicare IRMAA surcharge.

Others determine eligibility for benefits like premium tax credits for health insurance purchased on the ACA marketplace — a big deal for early retirees bridging the gap to Medicare.

And another is the ability to contribute to a Roth IRA.

Here’s the catch: each of these uses its own definition of MAGI. The MAGI that determines your IRMAA surcharge is not the same MAGI that determines your Roth IRA eligibility, which is not the same MAGI used for the Net Investment Income Tax. Assuming they’re all the same number is where most of the confusion — and most of the missed planning opportunities — comes from.

MAGI for Roth Contribution Formula

The exact formula for the MAGI used for Roth contribution eligibility is:

AGI + IRA Deduction + Student Loan Interest Deduction + Total Foreign Income Exclusions + Foreign Housing Deduction – Taxable Roth Conversion

For most people, the add-backs at the end of that formula are zero or small. The item that moves the needle — especially for retirees — is the subtraction of taxable Roth conversion income right at the start.

An Example

Say a married couple, both age 62, has the following income in 2026:

They have $70,000 of interest, dividends, and capital gains, plus $30,000 of part-time consulting income. They also execute a $200,000 Roth conversion as part of their multi-year tax plan.

Their AGI is $300,000 — well above the $252,000 cutoff where Roth contributions disappear. On the surface, no Roth contributions allowed.

But their MAGI for Roth contribution purposes subtracts the $200,000 conversion:

$300,000 − $200,000 = $100,000 MAGI

That’s comfortably below the $242,000 threshold. This couple can each make a full $8,600 Roth IRA contribution — $17,200 combined — on top of the $200,000 they just converted.

MAGI for Roth Contributions: The Surprising Carve-Out

Because each benefit or surcharge has its own MAGI calculation, it’s entirely possible to be over the threshold for one and under the threshold for another — even when the dollar amounts look similar on paper.

The Net Investment Income Tax is a good example. The NIIT applies to married couples filing jointly with a MAGI above $250,000 — a number that sits right in the middle of the 2026 Roth contribution phase-out range of $242,000 to $252,000. At a glance, you’d assume that anyone paying the NIIT has no shot at Roth contributions.

But because the two calculations of MAGI are different, it is entirely possible to be subject to the Net Investment Income Tax and still be able to make Roth IRA contributions.

Why? The MAGI calculation for Roth contribution eligibility backs out one key source of income: income from Roth conversions.

Many of those near retirement who are doing Roth conversions immediately assume they are no longer eligible for Roth IRA contributions. The tax return shows a big income number, so they stop contributing. But even if you are converting many hundreds of thousands of dollars, you may still be able to get additional contributions into your Roth IRA.

2026 Roth IRA Income Limits

Before getting into the calculation, here are the income thresholds for 2026:

Married filing jointly: You can make a full Roth IRA contribution if your MAGI is below $242,000. Contributions phase out between $242,000 and $252,000, and are not allowed at $252,000 or above.

Single or head of household: Full contributions are allowed below $153,000, phase out between $153,000 and $168,000, and are not allowed at $168,000 or above.

Married filing separately: If you lived with your spouse at any point during the year, the phase-out range is just $0 to $10,000 — effectively eliminating direct Roth contributions for most in this filing status.

For 2026, the contribution limit itself is $7,500, or $8,600 if you are age 50 or older. A married couple where both spouses are over 50 and both are eligible can put away $17,200 per year into Roth IRAs.

Don’t Forget: You Still Need Earned Income

There is one more requirement that trips up retirees: Roth IRA contributions require earned income — wages, self-employment income, or similar compensation. Investment income, pension payments, Social Security, and Roth conversion income do not count.

In the example above, the couple’s $30,000 of consulting income is what makes their $17,200 of contributions possible. Without any earned income, MAGI wouldn’t matter — no contributions would be allowed.

The good news for couples: a spousal IRA allows a non-working spouse to contribute based on the working spouse’s earned income. If one spouse earns at least $17,200 in our example, both spouses can max out their Roth IRAs.

For retirees with even modest part-time or consulting income, this is a frequently missed opportunity to keep funneling money into tax-free accounts well past traditional retirement age. And unlike traditional IRAs before the SECURE Act, Roth IRAs have never had an age limit on contributions.

What If Your MAGI Falls in the Phase-Out Range?

If your MAGI lands inside the phase-out range ($242,000–$252,000 for joint filers in 2026), you can make a reduced contribution rather than none at all.

The reduction is proportional. For example, a couple with a MAGI of $247,000 is halfway through the $10,000 phase-out range, so they can each contribute half the normal limit. The IRS provides a worksheet in Publication 590-A for the exact calculation, and any partial contribution amount is rounded in your favor to the nearest $10 (with a $200 minimum if you’re eligible to contribute anything at all).

What If Your Income Is Too High?

If you are in a position where you are doing Roth conversions, be sure to double check whether you are still eligible for Roth contributions to get some extra money into these great tax-free accounts.

And if your income is genuinely too high for regular Roth contributions — even after backing out conversions — you have a few other options to consider:

Can you do backdoor Roth IRA contributions? This strategy uses a non-deductible traditional IRA contribution followed by a conversion, and there is no income limit on either step. Just be careful of the pro-rata rule if you hold other pre-tax IRA balances.

Frequently Asked Questions

Do Roth conversions count toward the income limit for Roth contributions? No. The MAGI calculation for Roth contribution eligibility specifically subtracts taxable Roth conversion income. You can convert any amount and still be eligible to contribute, as long as your remaining MAGI is under the threshold and you have earned income.

Is the MAGI for Roth contributions the same as the MAGI for IRMAA? No. IRMAA uses your AGI plus tax-exempt interest — and it does not back out Roth conversions. A large conversion won’t block your Roth contributions, but it can absolutely trigger higher Medicare premiums two years later.

Can I contribute to a Roth IRA if I’m retired? Only if you (or your spouse, if filing jointly) have earned income such as wages or self-employment income. Investment income, pensions, and Social Security don’t qualify. There is no age limit, however.

What are the Roth IRA income limits for 2026? For married couples filing jointly, contributions phase out between $242,000 and $252,000 of MAGI. For single filers, the range is $153,000 to $168,000.

What happens if I contribute when my MAGI is too high? Excess contributions are subject to a 6% penalty each year they remain in the account. You can fix it by withdrawing the excess (plus earnings) before the tax deadline, recharacterizing it as a traditional IRA contribution, or applying it to a future year.

Get a Second Set of Eyes on Your Roth Strategy

The interaction between Roth conversions, Roth contributions, IRMAA, and the Net Investment Income Tax is exactly the kind of multi-year tax planning we do for our clients every day. If you’re executing conversions and want to make sure you aren’t leaving contribution opportunities — or triggering avoidable surcharges — on the table, we’d be happy to take a look. Schedule a free introductory meeting to see if we’re a good fit.

If you are in position where you are doing Roth conversions, be sure to double check if you are still eligible for Roth contributions to get some extra money into these great tax free accounts.

If your income is too high to do regular Roth contributions, you have a few other options to consider. Click the links below for details:

Can you do backdoor Roth IRA contributions?

Or, you could decide between making a non-deductible IRA contribution vs saving to a brokerage account