IRS Publication 17 — Your Federal Income Tax (Individuals)

2026 modified AGI limits. You can find information about the 2026 contribution and AGI limits in Pub. 590-A. Reminders Contributions to both traditional and Roth IRAs. For information on your combined contribution limit if you contribute to both traditional and Roth IRAs, see Roth IRAs and traditional IRAs, later.

Statement of required minimum distribution. If a minimum distribution from your IRA is required, the trustee, custodian, or issuer that held the IRA at the end of the preceding year must either report the amount of the required minimum distribution to you, or offer to figure it for you. The report or offer must include the date by which the amount must be distributed. The report is due January 31 of the year in which the minimum distribution is required. It can be provided with the year -end fair market value statement that you normally get each year. No report is required for IRAs of owners who have died.

IRA interest. Although interest earned from your IRA is generally not taxed in the year earned, it isn’t tax -exempt interest. Tax on your traditional IRA is generally deferred until you take a distribution. Don't report this interest on your tax return as tax-exempt interest.

Net Investment Income Tax (NIIT). For purposes of the NIIT , net investment income doesn't include distributions from 401(a), 403(a), 403(b), or 457(b) plans, or IRAs. However, these distributions are taken into account when determining the modified AGI threshold. Distributions from retirement plans other than 401(a), 403(a), 403(b), or 457(b) plans, or IRAs, are included in net investment income. See Form 8960, Net Investment Income Tax—Individuals, Estates, and Trusts, and its instructions for more information.

Form 8606. T o designate contributions as nondeductible, you must file Form 8606. The term “50 or older” is used several times in this chapter. It refers to an IRA owner who is age 50 or older by the end of the tax year.

Introduction An IRA is a personal savings plan that gives you tax advantages for setting aside money for your retirement.

This chapter discusses the following topics.

• The rules for a traditional IRA (any IRA that isn't a Roth or SIMPLE IRA).

• The Roth IRA, which features nondeductible contributions and tax-free distributions. Simplified Employee Pensions (SEPs) and Savings Incentive Match Plans for Employees (SIMPLE) plans aren't discussed in this chapter. For more information on these plans and employees' SEP IRAs and SIMPLE IRAs that are part of these plans, see Pub. 560.

For information about contributions, deductions, withdrawals, transfers, rollovers, and TIP other transactions, see Pub. 590 -A and Pub. 590-B.

Useful Items You may want to see: Publication 560 Retirement Plans for Small Business 575 Pension and Annuity Income 590-A Contributions to Individual Retirement Arrangements (IRAs) 590-B Distributions from Individual Retirement Arrangements (IRAs) Form (and Instructions) 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 8606 Nondeductible IRAs 8915-F Qualified Disaster Retirement Plan Distributions and Repayments For these and other useful items, go to IRS.gov/ Forms.

Types of IRAs An IRA can be either a traditional IRA or a Roth IRA. In general, individuals may make their own contributions to their traditional IRAs or Roth IRAs. In addition, certain employers have arrangements under which the employer may contribute to IRAs of their employees.

Under a SEP arrangement, an employer contributes to traditional IRAs (sometimes referred to as traditional SEP IRAs) or Roth IRAs (sometimes referred to as Roth SEP IRAs) of its employees. Individuals may separately make their own contributions to the same IRAs to which their employer contributes under a SEP arrangement. Under a SIMPLE IRA plan, an employer contributes salary reduction contributions (at the election of the employee), matching contributions and/or nonelective contributions to traditional IRAs (sometimes referred to as traditional SIMPLE IRAs) or Roth IRAs (sometimes referred to as Roth SIMPLE IRAs) of its employees. However, a SIMPLE IRA (whether a traditional SIMPLE IRA or a Roth SIMPLE IRA) is subject to certain restrictions that do not generally apply to other traditional IRAs or Roth IRAs. For example, an individual cannot make their own contributions to a SIMPLE IRA. In addition, there are various restrictions related to distributions and contributions during the initial 2 years of participation in the SIMPLE IRA plan.

References in this publication to traditional IRAs generally include traditional SEP IRAs but do not include traditional SIMPLE IRAs, unless otherwise stated. Likewise, references to Roth IRAs generally include Roth SEP IRAs but do not include Roth SIMPLE IRAs, unless otherwise stated. Traditional IRAs In this chapter, the original IRA (sometimes called an ordinary or regular IRA) is referred to 560 575 590-A 590-B 5329 8606 8915-Fas a “traditional IRA.” A traditional IRA is any IRA that isn't a Roth IRA or a SIMPLE IRA. Traditional IRAs include traditional IRAs that receive employer contributions from SEP arrangements. Two advantages of a traditional IRA are that:

• You may be able to deduct some or all of your contributions to it, depending on your circumstances; and

• Generally, amounts in your IRA, including earnings and gains, aren't taxed until they are distributed.

Who Can Open a Traditional IRA?

You can open and make contributions to a traditional IRA if you (or, if you file a joint return, your spouse) received taxable compensation during the year.

For tax years beginning after 2019, there is no age limit on making contributions to your traditional IRA. For more information, see Pub. 590-A.

What is compensation? Generally, compensation is what you earn from working. Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts you receive for providing personal services. The IRS treats as compensation any amount properly shown in box 1 (Wages, tips, other compensation) of Form W -2, Wage and Tax Statement, provided that this amount is reduced by any amount properly shown in box 11 (Nonqualified plans).

Scholarship or fellowship payments are generally compensation for this purpose only if reported in box 1 of your Form W -2. However, for tax years beginning after 2019, certain non -tuition fellowship and stipend payments not reported to you on Form W -2 are treated as taxable compensation for IRA purposes. These amounts include taxable non -tuition fellowship and stipend payments made to aid you in the pursuit of graduate or postdoctoral study and included in your gross income under the rules discussed in chapter 1 of Pub. 970, Tax Benefits for Education.

Compensation also includes commissions and taxable alimony and separate maintenance payments.

Self-employment income. If you are self-employed (a sole proprietor or a partner), compensation is the net earnings from your trade or business (provided your personal services are a material income -producing factor) reduced by the total of:

• The deduction for contributions made on your behalf to retirement plans, and

• The deductible part of your self-employment tax. Compensation includes earnings from self-employment even if they aren't subject to self-employment tax because of your religious beliefs.

Nontaxable combat pay. For IRA purposes, if you were a member of the U.S. Armed TIP 78 Chapter 9 Individual Retirement Arrangements (IRAs) Publication 17 (2025)