You save money in your traditional IRA because you want to be able to retire comfortably someday, but you also want the tax break you get today for making contributions. That could result in a nice tax refund that you can then reinvest in your IRA for next year.
But this isn't an option for everyone. The IRS forbids certain workers from deducting their IRA contributions in the year they make them, and it reevaluates which workers are ineligible each year. Here's how to figure out if you'll be allowed to deduct your IRA contributions in 2026.
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Who can't make deductible IRA contributions in 2026?
The IRS limits deductible IRA contributions for high earners who are active participants in an employer-sponsored retirement plan, like a 401(k). Whether you fall into that group depends on your marital status and your household income.
You're considered an active participant if you contribute money to your workplace plan through paycheck deferrals or if your employer puts money into your account, such as with a 401(k) match. If neither of those applies to you, you're not an active participant, and you can deduct all your IRA contributions regardless of how much you earn in 2026.
Active participants will need to look at the following table to figure out whether their income and marital status will permit them to deduct their IRA contributions next year:
|
2026 Deductible IRA Contributions |
If You're Single, Are an Active Participant in Your Workplace Plan, and Your Income Is: |
If You're Married Filing Jointly, Are an Active Participant in Your Workplace Plan, and Your Household Income Is: |
If You're Married Filing Jointly, Your Spouse Is an Active Participant in Their Workplace Plan, and Your Household Income Is: |
|---|---|---|---|
|
Up to the annual limit |
$81,000 or less |
$129,000 or less |
$242,000 or less |
|
A reduced amount |
$81,000 to $91,000 |
$129,000 to $149,000 |
$242,000 to $252,000 |
|
None |
Greater than $91,000 |
Greater than $149,000 |
Greater than $252,000 |
Data source: IRS.
Most low- and middle-income Americans will still be eligible to deduct all their IRA contributions up to the annual limit. This will rise to $7,500 for adults under 50 in 2026 and $8,600 for those who will be 50 or older by the end of the year.
If you're only eligible to deduct a reduced amount or none of your IRA contributions, that doesn't mean you can't contribute to an IRA at all. You're still allowed to set aside a sum equal to the annual limit. You'll just be making what are called non-deductible IRA contributions. More on that in a minute.
Those eligible to deduct a reduced amount of their IRA contributions shouldn't have to calculate the deductible portion themselves. Your tax filing software or accountant should do this calculation for you when filling out your return. If you want an estimate in advance of how much you'll be able to deduct, an accountant may be able to help you with this.
Should you make non-deductible IRA contributions?
Non-deductible IRA contributions are contributions you make to a traditional IRA for which you don't get an initial tax break. This could raise your tax bill in the year you make the contribution, and you won't be able to tap these non-deductible contributions to help you cover the extra expense. Once the money is in your IRA, you'll face a 10% early withdrawal penalty for taking money out under 59 1/2, with few exceptions.
But after you've taken care of the initial tax liability, earnings on non-deductible contributions grow tax-deferred. That means you won't have to pay taxes on your earnings until you withdraw them from your account. And when you withdraw your non-deductible contributions, you won't owe any taxes on these.
Unlike Roth IRAs, which allow you to withdraw only contributions, the IRS considers your traditional IRA withdrawals to be a mix of deductible and non-deductible funds when you have both. For example, say you have $100,000 in your traditional IRA and $10,000 of this, or 10%, is a non-deductible contribution. If you take $1,000 out of your traditional IRA later, $100 would be considered non-deductible contributions. This would be tax-free. But you'd owe taxes on the remaining $900.
It's ultimately up to you to decide whether non-deductible IRA contributions make sense to you. If you're comfortable paying taxes upfront and your income doesn't exceed the limits, you might prefer to stash some money in a Roth IRA instead. Earnings in these accounts are also tax-free, as long as you wait until you're 59 1/2 and have had the account for at least five years before withdrawing them.
Alternatively, you could stash more money in your workplace plan instead of using your traditional IRA. Employer-sponsored plans, like 401(k)s, may also have limits on how much high earners can contribute. But you may be able to make more tax-deductible contributions here than you could in your IRA.
