2016 IRA Contribution Limit
For 2016, the IRA Contribution Limit is $5,500 (Annual contribution limit) and +$1,000 (Catch-up contribution limit, age 50 and over).
Effective 2016-01-01Source: IR-2015-118 (IRS)Verified 2026-08-29
Who it applies to
Taxpayers who make contributions to a traditional IRA or Roth IRA for the 2016 tax year.
What changed this year, and why
The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500 for 2016. The additional catch-up contribution limit for individuals aged 50 and over remains $1,000.
Common questions
- What is the catch-up contribution limit for IRA contributors aged 50 and over?
- The additional catch-up contribution limit for individuals aged 50 and over is $1,000 for 2016.
The extra amount once you reach 50
If you are age 50 or older by the end of 2016, the IRS allows you to contribute an extra $1,000 above the standard limit. This additional amount is called a catch-up contribution and is designed to help older workers build retirement savings more quickly as they approach retirement age. The catch-up provision applies to both traditional and Roth IRAs. So while the base contribution limit for 2016 is $5,500, someone who has reached age 50 can contribute up to $6,500 total to their IRA. This catch-up amount is available regardless of whether you contribute to one IRA account or multiple accounts, though the total across all your traditional IRAs cannot exceed the limit. The catch-up contribution is in addition to any regular contribution you make, and it is also subject to the overall compensation limit - you cannot contribute more than you earned from working during the year, even with the catch-up allowance.
For 2016, the most that can be contributed to your tradi- tional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year.
Publication 590-A (2016), Contributions to Individual Retirement Arrangements (IRAs) (IRS)
You cannot contribute more than you earned
The amount you can contribute to a traditional IRA is capped at the smaller of the annual dollar limit or your taxable compensation for the year. For 2016, the dollar limit is $5,500, but if your taxable compensation is less than that amount, your contribution limit is reduced to match your earnings. This means you cannot contribute more to your IRA than you earned from working during the year. Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services. The limit applies to the total of all contributions made to all your traditional IRAs combined, not to each account separately. So if you have multiple IRA accounts, the combined total cannot exceed the lesser of the dollar limit or your compensation.
For 2016, the most that can be contributed to your tradi- tional IRA generally is the smaller of the following amounts: $5,500 ($6,500 if you are age 50 or older), or Your taxable compensation (defined earlier) for the year.
Publication 590-A (2016), Contributions to Individual Retirement Arrangements (IRAs) (IRS)
Why a workplace plan can take the deduction away
If you or your spouse is covered by an employer retirement plan, your ability to deduct traditional IRA contributions may be reduced or eliminated based on your modified adjusted gross income and filing status. The phaseout begins when your income rises above a certain threshold and the deduction is completely eliminated when it reaches a higher amount. These income thresholds vary depending on your filing status - single, married filing jointly, or married filing separately. If only your spouse is covered by a workplace plan (but you are not), different phaseout rules apply that are generally more favorable. The phaseout only affects the deductibility of your contribution, not your ability to make the contribution itself. You can still contribute to a traditional IRA even if your deduction is phased out, but the contribution would be nondeductible.
The amount of any reduction in the limit on your IRA de- duction (phaseout) depends on whether you or your spouse was covered by an employer retirement plan.
Publication 590-A (2016), Contributions to Individual Retirement Arrangements (IRAs) (IRS)
How late you can still contribute for a year
The contribution deadline for IRA contributions is tied to your tax filing deadline. You can make contributions for a given tax year at any time during that year, or by the due date for filing your tax return for that year, not including extensions. For most people, this means contributions for 2016 must be made by April 18, 2017. This deadline applies to both traditional and Roth IRAs. Even if you file for an extension to file your tax return, the contribution deadline does not extend with it - you must make your IRA contributions by the original due date of your return, which is typically mid-April of the following year.
Contributions must be made by due date. Contribu- tions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your re- turn for that year, not including extensions.
Publication 590-A (2016), Contributions to Individual Retirement Arrangements (IRAs) (IRS)
The 6% tax on contributing too much
If you contribute more than the allowed limit to your IRA, you face a 6% excise tax on the excess amount. This tax applies each year the excess remains in your account, making it a recurring penalty rather than a one-time fee. However, you can avoid this tax entirely if you withdraw the excess contribution by the due date of your tax return, including extensions. For 2016 contributions, this means withdrawing any excess by April 18, 2017 (plus extensions). The excess contribution withdrawal must also include any income earned on that excess amount while it was in the account. If you miss this deadline, the 6% tax applies for that year and continues to apply each subsequent year until you correct the excess by withdrawing it or by having enough contribution room in a future year to absorb it.
If any part of these contributions is an excess contribution for 2015, it is subject to a 6% excise tax. You will not have to pay the 6% tax if any 2015 excess contribution was withdrawn by April 18, 2016 (plus extensions), and if any 2016 excess contribution is withdrawn by April 18, 2017 (plus extensions).
Publication 590-A (2016), Contributions to Individual Retirement Arrangements (IRAs) (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
IR-2015-118 (IRS)
- Annual contribution limit
The deductible amount under Section 219(b)(5)(A) for an individual making qualified retirement contributions remains unchanged at $5,500.
- Catch-up contribution limit, age 50 and over
The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.