Can I keep contributing to my rollover IRA, or do I lose something if I do?

By Kaz · Published 6 October 2026 · How this site checks figures

Summary

Yes. A rollover IRA is a traditional IRA under another name, so it takes regular contributions up to the 2026 limit of $7,500, or $8,600 if you're 50 or older, counted across all your traditional and Roth IRAs together. Keeping contributions in the same account as the rollover money doesn't change how either is taxed. It changes two things: nondeductible contributions become basis that can't be moved into a 401(k) later, and in bankruptcy your own contributions and their earnings count toward a capped exemption that the rollover money doesn't.

Where the "don't mix" advice comes from

Older guides told people to keep a rollover IRA untouched, as a "conduit IRA." The IRS's Publication 590 for 2001 still describes the conduit IRA as a holding account for rollover money, and it explains why the advice used to matter: before 2002, an IRA could generally go back into an employer plan only if it held nothing but money that came from one. The same publication announces the change. For distributions after December 31, 2001, you can "roll over, tax free, a distribution from your IRA into a qualified plan," limited to the part that would otherwise be taxable.

That limit is still in the statute. Section 408(d)(3)(A)(ii) caps what an IRA can send to a workplace plan at "the portion of the amount received which is includible in gross income." The rest of the conduit rule no longer applies, though advice written before 2002 still repeats it.

What a contribution changes

It depends on whether the contribution is deductible. For 2026, if you're covered by a workplace plan, the deduction phases out between $81,000 and $91,000 of modified AGI for a single filer, and between $129,000 and $149,000 for a married couple filing jointly when the contributing spouse is covered. For a spouse who isn't covered but is married to someone who is, the range is $242,000 to $252,000.

What you put in	Later move into a 401(k)	Form 8606	Bankruptcy exemption
Deductible contribution	Can go with the rest, if the plan accepts IRA rollovers	Not needed for it	Counts toward the capped amount
Nondeductible contribution	Must stay behind as basis	Required every year you have basis	Counts toward the capped amount
The original 401(k) rollover	Can go back, if the plan accepts	Not needed for it	Outside the cap

Example: one $7,500 contribution, ten years later

Say you rolled $150,000 of pretax 401(k) money into an IRA, earn $120,000 as a single filer covered by your new employer's plan, and add $7,500 for 2026. Your income is above $91,000, so none of it is deductible; it's $7,500 of basis on Form 8606.

Ten years later the IRA has grown to $320,000, a figure picked for the example, and your next employer's 401(k) accepts IRA rollovers. The fee calculator shows how much of ten years of growth a fund's annual expense ratio would take. Section 408(d)(3)(H) treats what goes to the plan as coming from taxable money first, so up to $312,500 can go, and the $7,500 of basis stays in the IRA. An IRA holding only basis is what makes a later backdoor Roth conversion close to tax-free, and the pro-rata rule and the backdoor Roth shows why. The Form 8606 side of the same situation, including what to record in the year of the rollover, is in nondeductible IRA contributions and Form 8606.

Had the $7,500 been deductible, all $320,000 could have gone to the plan. Whether the plan takes it is up to the plan; moving an IRA back into a 401(k) covers that part.

Would a second IRA help?

No, not for taxes. The pro-rata calculation on Form 8606 counts all your traditional IRAs together, so holding contributions in a separate account doesn't change how basis is taxed when money comes out. A second account helps with tracing. Form 5498 reports regular contributions in box 1 and rollovers in box 2, and two accounts with clean histories are easier to show to a bankruptcy trustee than one with ten years of both.

That tracing is the bankruptcy point. The exemption cap for traditional and Roth IRAs, $1,711,975 for cases filed on or after April 1, 2025, is figured without the money that came from employer-plan rollovers and its earnings. How creditor protection changes after a rollover works through an example. The split matters only when your own contributions and their earnings approach that figure.

One practical point before you send a contribution: on the deposit form, check that it's coded as a contribution for the year you intend, not as a rollover. The coding decides which box of Form 5498 it lands in, and a contribution reported as a rollover is a correction you then have to ask the custodian for.

Sources

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