What is a backdoor Roth IRA?

It's a two-step method for high earners who are over the Roth income limit: contribute to a nondeductible traditional IRA (which has no income limit), then convert that money to a Roth IRA. The result is money in a Roth that you couldn't have contributed directly.

What is the pro-rata rule?

If you hold any pre-tax money in traditional, SEP, or SIMPLE IRAs, the IRS treats all of them as one pool when you convert. Your conversion is then partly taxable in proportion to the pre-tax share — so a backdoor Roth is cleanest when you have no other pre-tax IRA balances.

Is the backdoor Roth still allowed?

As of 2026 it remains legal. It has been targeted by proposed legislation several times but no ban has been enacted. Because it's a strategy with moving parts and tax reporting, it's best done with professional guidance, and you should confirm current rules before acting.

Backdoor Roth IRA, explained

If you earn too much to contribute to a Roth IRA directly, there’s a legal side door. It’s simple in concept and easy to get wrong in one specific way — the pro-rata rule.

The idea in two steps

The Roth IRA has an income limit, but the traditional IRA has none for nondeductible contributions, and a Roth conversion has no income limit either. Put those facts together:

Step 1. Contribute after-tax money to a traditional IRA (a nondeductible contribution).
Step 2. Convert that traditional IRA to a Roth IRA, usually right away.

Because you contributed after-tax dollars and convert before much growth, the conversion is typically little- or no-tax — and the money now grows tax-free in the Roth. That’s the “backdoor.”

The one big trap: the pro-rata rule

Here’s where people get burned. If you hold any pre-tax money in traditional, SEP, or SIMPLE IRAs, the IRS treats all your IRAs as a single pool when you convert. Your conversion is then taxed in proportion to the pre-tax share — so you can’t just convert “only the after-tax part.” The backdoor Roth is clean only when you have no other pre-tax IRA balances.

The fix: many high earners do a “reverse rollover” first — moving pre-tax IRA money into a current employer’s 401(k) (which is allowed and isn’t counted in the pro-rata calculation). That empties the IRA pool and clears the way. See 401(k) rollover options.

Is it still allowed?

As of 2026, the backdoor Roth remains legal. Lawmakers have proposed closing it more than once, but no ban has passed. Because the rules can change and the tax reporting (Form 8606) is fiddly, this is a strategy worth doing with a professional — and worth re-checking against current law before each year’s contribution.

Where it fits

The backdoor Roth is one way to keep building the tax-free bucket after income rules close the front door. For high earners who’ve also maxed it, other tax-advantaged vehicles without income caps (see types of life insurance) can extend that bucket further.

Frequently asked questions

What is a backdoor Roth IRA?: A two-step move for high earners: contribute to a nondeductible traditional IRA (no income limit), then convert it to a Roth. You end up with Roth money you couldn’t contribute directly.
What is the pro-rata rule?: If you hold pre-tax IRA money, all IRAs are treated as one pool and the conversion is partly taxable in proportion. Cleanest with no pre-tax IRA balances.
Is it still allowed?: Yes, as of 2026 — though it’s been targeted by proposals. Do it with professional guidance and confirm current rules.

Keep exploring: Roth IRA income limits · Roth IRA calculator · Why tax diversification matters

Educational only; not financial or tax advice. The backdoor Roth involves specific tax reporting and rules that can change — confirm with a professional before acting.