SIMPLE IRA and Traditional IRA Contribution Limits

For 2026, the SIMPLE IRA and Traditional IRA contribution limits sit at separate ceilings: you can defer up to $17,000 into a SIMPLE IRA (or $18,100 if your employer has 25 or fewer employees) and contribute up to $7,500 to a Traditional IRA, with additional catch-up amounts if you are 50 or older.¹ The two plans have independent caps, so contributing to both in the same year is allowed.

The 2026 Numbers Side by Side

Traditional IRA: $7,500 base limit, $8,600 if you’re 50 or older by December 31, 2026.² The $1,100 catch-up is now indexed to inflation under SECURE 2.0, replacing the old flat $1,000.

SIMPLE IRA employee deferral: $17,000 base, or $18,100 at employers with 25 or fewer employees (larger employers with 26 to 100 employees can also elect the higher $18,100 ceiling, but only if they commit to a 4% match or 3% non-elective contribution).²

Catch-ups on top of the SIMPLE base:

Age 50 and older: an extra $4,000, for a total of $21,000 (or $22,100 under the higher small-employer limit).³
Ages 60 through 63: a “super catch-up” of $5,250 that replaces the standard catch-up, bringing the total to $22,250 (or $23,350 under the higher limit).¹

The super catch-up is a SECURE 2.0 provision that took effect in 2025. It does not stack on top of the regular $4,000 catch-up. Once you turn 64, you drop back to the standard amount.

Traditional IRA Limit in More Detail

The $7,500 ceiling is a combined cap on all Traditional and Roth IRA contributions you make. Put $5,000 into a Roth, and you have $2,500 left for a Traditional IRA that same year.⁴ This combined cap does not touch anything you contribute through an employer plan, including a SIMPLE IRA or 401(k).

You also can’t contribute more than your earned income for the year. If you made $4,000, that’s your ceiling.

SIMPLE IRA Eligibility and Basics

SIMPLE IRAs are limited to businesses with 100 or fewer employees.⁵ Your contributions come out of your paycheck as salary deferrals, before income taxes.

To be eligible, you generally must have earned at least $5,000 from the employer in any two prior calendar years and expect to earn at least $5,000 in the current year.⁶ Employer matching or non-elective contributions sit on top of your deferral and don’t count against your own $17,000 or $18,100 limit.

Can You Contribute to Both in the Same Year?

Yes. The SIMPLE IRA and Traditional IRA limits are entirely separate. You could defer $17,000 into your SIMPLE IRA at work and put another $7,500 into a Traditional IRA on your own.⁴

The complication is the tax deduction on the Traditional IRA side. A SIMPLE IRA counts as being “covered by a plan at work” for deductibility purposes, so once your income crosses certain thresholds the Traditional IRA deduction shrinks or disappears. You can still make the contribution, but it may be non-deductible.

Traditional IRA Deduction Phase-Outs for 2026

Anyone with earned income can contribute to a Traditional IRA regardless of income. Whether that contribution is deductible depends on your Modified Adjusted Gross Income and whether you (or your spouse) are covered by a workplace plan. If neither of you is covered, the full deduction is available at any income level.

If you’re covered by a plan at work in 2026, the deduction phases out over these ranges:¹

Single or head of household: partial deduction between $81,000 and $91,000 MAGI. No deduction above $91,000.
Married filing jointly, contributing spouse covered by a plan: partial deduction between $129,000 and $149,000. No deduction above $149,000.
Married filing separately, covered by a plan: partial deduction between $0 and $10,000. This range is not adjusted for inflation.

If only your spouse is covered by a workplace plan and you are not, a more generous range applies to your deduction: phase-out between $242,000 and $252,000 MAGI for 2026.¹

Contribution Deadlines

You can make Traditional IRA contributions for 2026 anytime from January 1, 2026 through the federal tax filing deadline, typically April 15, 2027. Filing an extension on your return does not extend the IRA contribution deadline.⁷

SIMPLE IRA employee deferrals must be deposited by your employer within 30 days after the end of the month in which you would have received the money in cash.⁵ The Department of Labor imposes a stricter 7-business-day safe harbor that most employers follow in practice.

Mandatory Roth Catch-Up for High Earners

Starting January 1, 2026, SECURE 2.0 requires catch-up contributions from higher-paid employees to go into a Roth account rather than pre-tax. The rule applies if you earned $150,000 or more in Social Security wages (Box 3 of your W-2) during the prior year, and it covers 401(k), 403(b), governmental 457(b), and SIMPLE IRA plans.

If your employer’s SIMPLE IRA plan doesn’t yet offer a Roth option, you may lose the ability to make catch-up contributions until the plan is amended. Worth checking with your plan administrator before the year begins.

What Happens If You Go Over

Excess contributions get hit with a 6% excise tax on the amount over the limit, and that tax applies for every year the excess stays in the account.⁸ The penalty compounds annually, so a small overcontribution left alone for a decade turns into a real bill.

To avoid the tax, withdraw the excess plus any earnings on it by the due date of your tax return, including extensions. Catch the mistake after that, and you can apply the excess toward the following year’s limit instead, but the 6% tax still applies for the year of the original overcontribution.

For SIMPLE IRAs, correcting excess employer contributions is more involved. The employer can either return the excess (adjusted for earnings) to the employee or keep it in the account and pay the IRS a correction fee of at least 10% of the excess.⁹ Excess amounts of $100 or less are exempt from the correction requirement.

1
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
2
Internal Revenue Service. Notice 2025-67 – 2026 Amounts Relating to Retirement Plans and IRAs
3
Internal Revenue Service. Retirement Topics – SIMPLE IRA Contribution Limits
4
Internal Revenue Service. Retirement Topics – IRA Contribution Limits
5
Internal Revenue Service. Retirement Plans FAQs Regarding SIMPLE IRA Plans
6
Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
7
Internal Revenue Service. Traditional and Roth IRAs
8
Internal Revenue Service. Excess IRA Contributions
9
Internal Revenue Service. SIMPLE IRA Plan Fix-It Guide – You Made Incorrect Employer Contributions for Eligible Employees