IRA Contribution Limits (2026)
Annual IRS limits on traditional and Roth IRA contributions — contribution windows and Roth conversion opportunities matter most right after a layoff.
Current value (2026)
$7,500
Primary source
Historical values
| Year | Value |
|---|---|
| 2026 | $7,500 |
| 2025 | $7,000 |
| 2024 | $7,000 |
What this means if you were laid off
An IRA contribution is one of the few tax moves you can still make after the calendar year closes. The deadline is your tax filing date, including extensions. For 2026, that means April 15, 2027.
The contribution limit is $7,500 for 2026 (up from $7,000 in 2025, per IRS Notice 2025-67). The $7,500 limit applies across all IRAs you own, traditional and Roth combined.
The year of a layoff is often the first year your income drops into Roth IRA eligibility. Roth contributions phase out starting at $150,000 modified adjusted gross income for single filers and $236,000 for married filing jointly in 2026. If your total income for the year stays below those thresholds because you did not work the full year, you can contribute directly to a Roth. That is worth evaluating before you file.
Income does not stop you from contributing to a traditional IRA, but your deductibility depends on whether you or your spouse have an active employer retirement plan. If neither of you had workplace coverage in 2026, the full traditional IRA contribution is deductible at any income level.
You need earned income to contribute. Severance paid through your regular payroll counts as wages and qualifies. Investment income and rental income do not.
One more angle: if your income dropped significantly in the layoff year, a Roth conversion while your rate is low can move pre-tax retirement savings into a Roth at a lower cost than you will face when income recovers. The converted amount is taxable at your current-year rate. A gap year is often the lowest tax-cost window for a conversion.
Frequently asked questions
- What is the IRA contribution limit for 2026?
- $7,500 for both traditional and Roth IRAs, per IRS Notice 2025-67. This limit applies per person across all IRA accounts combined.
- Can I contribute to a Roth IRA after a layoff?
- Yes, if your modified adjusted gross income for the year stays below the Roth phase-out threshold ($150,000 for single filers, $236,000 for married filing jointly in 2026). A year with reduced earnings from a layoff often falls below these limits.
- Does severance count as earned income for IRA purposes?
- Yes. Severance paid through your regular payroll is treated as W-2 wages and qualifies as earned income for IRA contribution purposes.
- Can I still contribute to my IRA for 2026 if I miss the year-end?
- Yes. IRA contributions can be made until your tax filing deadline, which is typically April 15 of the following year. You must designate the contribution year when you make it.
- Is a traditional IRA contribution deductible if I was laid off and had no employer plan during the year?
- If neither you nor your spouse participated in an employer retirement plan during the year, the full traditional IRA contribution is deductible regardless of income. If you had a plan through any employer for any part of the year, different rules apply.
See your full-year tax picture
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Calculate your severanceLast verified: 2026-05-04. Not legal, financial, or tax advice. Methodology.