Can foreigners open an IRA in the United States?

Yes, foreigners can open an IRA, but only if they have US earned income. Non-resident aliens without US employment cannot contribute to an IRA, regardless of their investment activity in US markets.

Can I open an IRA with an ITIN?

Yes, you can open an IRA using an Individual Taxpayer Identification Number (ITIN) rather than a Social Security Number. However, you still need US earned income to make contributions.

What happens to my IRA when I leave the US?

Your IRA remains in place and can continue to grow. However, you cannot make new contributions without US earned income. Withdrawals may be subject to US withholding tax, and you should review tax treaty provisions between the US and your home country.

Can Foreigners Use IRA Retirement Accounts?

The Short Answer

Yes, foreigners CAN open an IRA - but only if they have US earned income. Non-resident aliens without US employment generally cannot contribute to an IRA.

The Key Requirement: US Earned Income

To contribute to any IRA (Traditional or Roth), you must have "earned income" from US sources. This is the fundamental requirement that determines whether a foreigner can use retirement accounts.

Earned income includes:

Wages, salaries, tips from US employment
Self-employment income from a US business
Commissions earned in the US

The following do NOT count as earned income:

Investment income (dividends, capital gains, interest)
Rental income
Pension or annuity payments
Income earned outside the US

Common Misconception

Simply opening a US brokerage account or investing in US stocks does not give you earned income. You cannot contribute to an IRA based on trading profits, dividends, or other investment returns.

Who Can Open an IRA?

H-1B Visa Worker

Working for a US company on an H-1B visa? You can contribute to a Traditional IRA, Roth IRA (income limits apply), and participate in your employer's 401(k).

L-1 Intracompany Transferee

Transferred to a US office? Your US salary qualifies as earned income. You're eligible for all retirement account options.

E-2 Treaty Investor

Running a business on an E-2 visa? Your salary from the business counts as earned income, making you eligible for IRAs.

Green Card Holder

Permanent residents are treated like US citizens for tax purposes. Full access to all retirement accounts with US earned income.

Non-Resident Investor

Living abroad and only investing in US stocks? No US earned income means no IRA eligibility, regardless of investment size.

B-1/B-2 Tourist

Visiting the US? Tourist visas don't permit employment, so you have no earned income and cannot contribute to an IRA.

Types of US Retirement Accounts

Account Type	Tax Treatment	2024 Limit	Foreign Eligibility
Traditional IRA	Tax-deductible contributions, taxed on withdrawal	$7,000 ($8,000 if 50+)	With US earned income
Roth IRA	After-tax contributions, tax-free growth and withdrawal	$7,000 ($8,000 if 50+)	With US earned income + income limits
401(k)	Pre-tax contributions through employer	$23,000 ($30,500 if 50+)	Must have US employer
SEP IRA	For self-employed, higher limits	25% of compensation up to $69,000	With US self-employment income
HSA	Triple tax-advantaged health savings	$4,150 individual / $8,300 family	With qualifying health plan

Traditional IRA vs. Roth IRA for Foreigners

Traditional IRA

Contributions may be tax-deductible, reducing your current US tax burden. Withdrawals in retirement are taxed as ordinary income. If you plan to return to your home country, you'll need to consider how withdrawals are taxed under your country's tax treaty with the US.

Roth IRA

Contributions are made with after-tax dollars, but qualified withdrawals are completely tax-free. This can be advantageous if:

You expect to be in a higher tax bracket in retirement
Your home country has a tax treaty that excludes Roth withdrawals from taxation
You want tax-free growth without Required Minimum Distributions (RMDs)

Roth IRA Income Limits (2024)

To contribute fully to a Roth IRA, your modified AGI must be below $161,000 (single) or $240,000 (married filing jointly). Contributions phase out above these limits.

What Happens When You Leave the US?

If you return to your home country, your IRA remains in place. However, several considerations apply:

Maintaining the Account

You can keep the IRA open and invested after leaving
You cannot make new contributions without US earned income
Some brokerages may restrict access for non-US residents
Address changes may require updating your W-8BEN status

Withdrawal Considerations

Traditional IRA: Withdrawals are subject to 30% withholding (or lower treaty rate)
Roth IRA: Qualified withdrawals are generally not subject to US tax, but verify treaty treatment
Early Withdrawal: 10% penalty applies if under 59.5 (some exceptions exist)

Tax Treaty Critical

Your home country's tax treaty with the US significantly affects how IRA distributions are taxed. Some countries tax worldwide income, meaning you may owe taxes at home on US retirement account withdrawals. Consult a cross-border tax advisor before making decisions.

Alternatives for Non-Eligible Foreigners

If you don't have US earned income, consider these alternatives for tax-efficient investing:

Regular Brokerage Account

No earned income requirement
Capital gains from trading generally not taxable for NRAs
Dividends subject to 30% withholding (or treaty rate)
Consider accumulating ETFs to minimize dividend drag

Tax-Advantaged Accounts in Your Home Country

Many countries have their own retirement account systems
May offer better tax treatment under local law
Avoid cross-border complications

US Real Estate Investment

No income requirement to purchase property
Rental income and appreciation potential
1031 exchanges for tax-deferred sales
Learn about real estate investment

Common Questions

Can I open an IRA with my ITIN?

Yes, you can open an IRA using an Individual Taxpayer Identification Number (ITIN) rather than an SSN. However, you still need US earned income to contribute.

Does my foreign income count toward IRA eligibility?

No. Only income that is subject to US taxation counts as earned income for IRA purposes. Income earned in your home country, even if reported to the IRS, does not qualify.

Can I roll over my home country's retirement account to a US IRA?

Generally no. US retirement accounts only accept rollovers from other US qualified plans. Foreign pension plans cannot be directly transferred to an IRA.

What if I'm a dual citizen?

US citizens (including dual citizens) are taxed on worldwide income. If you have earned income from anywhere in the world, you may be able to contribute to an IRA, subject to the Foreign Earned Income Exclusion limitations.