What Is Considered Qualified Earned Income for a Roth IRA?

A Roth IRA offers a way to save for retirement and allow your money to grow without paying income taxes on the investment gains. Any withdrawals you make after age 59 1/2 are tax-free as long as the account has been open at least five years. You must qualify to contribute to a Roth individual retirement account, with one of the criteria being that you must have earned income.


Qualified earned income for a Roth IRA include any wages, salaries or tips paid from an employer as well as self-employment income and any union strike benefits and long-term disability payments received prior to retirement age.

What Is Qualifying Earned Income?

The Internal Revenue Service defines what is earned income for the purposes of qualifying for Roth IRA contributions. Income from wages, salaries, tips and other forms of taxable pay when working for someone else are earned income. Self-employment income also is earned income. Union strike benefits and long-term disability payments received before you reach retirement age round out the list of types of income that qualify you to make Roth IRA contributions.

Nonqualifying Income Examples

Income that is not earned does not qualify you to contribute to a Roth IRA. Examples of this income are retirement pensions, Social Security payments, interest and dividend income, unemployment benefits as well as alimony and child support. Unemployment benefits are also not considered earned income.

Roth IRA Contribution Amounts

You can contribute to a Roth IRA if you are married, file a joint return and have modified adjusted gross income of less than $203,000, as of 2019. If you are single or the head of a household, the amount drops to $137,000. The maximum you can contribute to all of your IRA accounts is $6,000 a year, or $7,000 if you are age 50 or older.

Funding Rules for Spouses

You may be eligible to fund an IRA for a spouse, even if he does not have earned income. You can fund your spouse's IRA contribution, up to the maximum allowed, from your own earned income. Your total contributions for both spouses can't exceed your earned income.

Let's say you earn $7,000 a year in salary and your husband does not work. You contribute $4,000 to your own Roth IRA. You can contribute up to $3,000 to your husband's IRA, because your total contributions are not more than your earned income.