Traditional IRA Deduction Phase-Outs and Income Limits

The Traditional IRA deduction income limits for 2026 depend on one question first and your income second: is anyone in your household covered by a retirement plan at work? If neither you nor your spouse is covered, you can deduct the full contribution at any income level. If you’re covered, the deduction phases out between $81,000 and $91,000 for single filers and between $129,000 and $149,000 for married couples filing jointly. If only your spouse is covered, the joint phase-out runs from $242,000 to $252,000.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500

The 2026 contribution limit itself is $7,500 if you’re under 50 and $8,600 if you’re 50 or older. That cap is the combined ceiling across your Traditional and Roth IRAs for the year.

Start Here: Are You Covered by a Workplace Plan?

Before any income number matters, figure out whether you or your spouse is considered covered. The IRS defines participation broadly: 401(k)s, 403(b)s, SEP IRAs, SIMPLE IRAs, traditional pensions, and government plans all count. You’re considered covered even if you personally contributed nothing, as long as your employer made contributions or forfeitures to your account during the year.2Internal Revenue Service. Are You Covered by an Employer’s Retirement Plan?

Check Box 13 on your W-2. If the “Retirement plan” box is checked, the IRS treats you as covered.2Internal Revenue Service. Are You Covered by an Employer’s Retirement Plan? If neither W-2 in the household has that box checked, the phase-outs below don’t apply to you at all. You get the full deduction regardless of what you earn.

2026 Phase-Out Ranges When You Are Covered

When you personally participate in a workplace plan, the IRS scales your deduction based on your Modified Adjusted Gross Income. Below the bottom of the range, you deduct everything. Above the top, you deduct nothing. Inside the range, you deduct a portion.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500

  • Single or head of household: full deduction below $81,000, partial from $81,000 to $91,000, no deduction above $91,000.
  • Married filing jointly: full deduction below $129,000, partial from $129,000 to $149,000, no deduction above $149,000.
  • Married filing separately: the range is $0 to $10,000, and it is not adjusted for inflation. If you lived with your spouse at any time during the year and your income reaches $10,000, you get no deduction.3Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs

One exception is worth knowing. If you file separately and did not live with your spouse at any point during the year, the IRS treats you as a single filer for this purpose. That gives you the $81,000 to $91,000 range instead of the punishing $0 to $10,000 window.

When Only Your Spouse Is Covered

The rules soften considerably when you personally have no workplace plan but your spouse does. For 2026, the phase-out on a joint return runs from $242,000 to $252,000 of combined income.1Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 Below $242,000, you deduct the full contribution. Above $252,000, no deduction.

That’s a much higher ceiling than the $129,000 to $149,000 range that applies to the covered spouse in the same household. Couples in that income band can often preserve a deduction for the non-covered partner even when the covered partner has phased out entirely.

Which Income Figure to Use

The income the IRS compares against these thresholds is your Modified Adjusted Gross Income, not the AGI on line 11 of Form 1040. For most people the two are identical. But you have to add certain items back to AGI if any of them apply to you:4Internal Revenue Service. Modified Adjusted Gross Income

  • The Traditional IRA deduction itself (the IRS worksheet handles the circular math).
  • The student loan interest deduction from Schedule 1, line 21.
  • Foreign earned income or housing exclusion from Form 2555.
  • The foreign housing deduction from Form 2555.
  • Excluded U.S. savings bond interest from Form 8815.
  • Employer-provided adoption benefits excluded on Form 8839.

If none of those apply, MAGI equals AGI. If any do, run the numbers carefully. A few thousand dollars in add-backs can push you across a threshold and change your deduction.

How a Partial Deduction Is Calculated

When your MAGI lands inside a phase-out range, the deduction scales proportionally to where you sit in that range. Take your MAGI, subtract the bottom of the range, divide by the width of the range, and multiply by your contribution limit. Subtract that result from the limit. What remains is your maximum deductible amount. Partial results round up to the nearest $10, and any calculation that would produce between $1 and $199 rounds to a $200 minimum deduction.

An example. You’re single, 45, covered by a 401(k), and your 2026 MAGI is $86,000. The range is $81,000 to $91,000, a $10,000 window. You’re $5,000 in, which is half. Half of the $7,500 contribution limit is $3,750, so $3,750 of your contribution is deductible. The other $3,750 is nondeductible if you contribute the full amount. Publication 590-A has a worksheet that walks through the arithmetic in more detail.5Internal Revenue Service. IRA Deduction Limits

What Happens to the Nondeductible Portion

You can still contribute to a Traditional IRA even when part or all of the contribution is nondeductible. Those after-tax dollars become your “basis” in the account, and when you take distributions in retirement, the portion that came from basis should not be taxed a second time. But that protection only exists if you documented the basis in the year you created it.6Internal Revenue Service. Instructions for Form 8606 – Nondeductible IRAs

Form 8606 is how you do that. File it for every year you make a nondeductible contribution, and keep copies until every dollar has been distributed from all your Traditional IRAs. Without the paper trail, the IRS treats the entire eventual distribution as taxable, which effectively taxes the same dollars twice. The direct penalties for skipping the form are small ($50 for failing to file, $100 for overstating nondeductible contributions), but the tax cost of a lost basis record can run into the thousands decades later.6Internal Revenue Service. Instructions for Form 8606 – Nondeductible IRAs

You have until the April tax filing deadline for the following year to make a contribution that counts for 2026, which for most filers means April 15, 2027. That gives you time to finalize your MAGI before deciding how much to contribute and how much of it will be deductible.