How to Open a Roth IRA as a Non-US Citizen (2025 Legal Guide)

Can Non-US Citizens Open a Roth IRA?

A Roth IRA (Individual Retirement Account) is a powerful tool for building tax-free retirement savings, and the good news is that non-US citizens can open one under certain conditions. Unlike traditional IRAs, Roth IRAs allow contributions with after-tax dollars, meaning qualified withdrawals (after age 59½ and a five-year holding period) are tax-free in the US. This makes them particularly attractive for long-term wealth building, even for non-residents or temporary US workers.

Roth IRA Basics

• Contributions: Made with after-tax income, up to $7,000 annually in 2025 ($8,000 if age 50 or older).
• Tax Benefits: Earnings grow tax-free, and qualified withdrawals are not taxed by the IRS.
• Flexibility: Contributions (not earnings) can be withdrawn anytime without penalty, offering liquidity for emergencies.

IRS Requirements for Eligibility

The IRS allows anyone with taxable US-sourced earned income to contribute to a Roth IRA, regardless of citizenship. Earned income includes wages, salaries, tips, bonuses, or self-employment income but excludes passive income like dividends or rental income. Additionally, your modified adjusted gross income (MAGI) must fall within certain limits:

• Single filers: Full contributions allowed if MAGI is under $150,000; partial contributions phase out up to $165,000.
• Married filing jointly: Full contributions allowed if MAGI is under $236,000; partial up to $246,000.

Resident Aliens vs. Nonresident Aliens

• Resident Aliens: Non-US citizens with a green card or those who meet the IRS’s substantial presence test (183 days in the US over three years) are treated as US residents for tax purposes and are typically eligible to open a Roth IRA.
• Nonresident Aliens: Those who don’t meet the substantial presence test can still open a Roth IRA if they have US-sourced earned income and file taxes as nonresidents (Form 1040NR). However, contributions must come from US earnings, not foreign income.

SSN or ITIN Requirements

To open a Roth IRA, you need a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Most non-US citizens working legally in the US (e.g., on H1B, F1 with OPT, or J1 visas) can obtain an SSN. Undocumented immigrants or others without an SSN may apply for an ITIN through the IRS by filing Form W-7, enabling them to open a Roth IRA.

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Roth IRA Eligibility for Immigrants and International Students

Non-US citizens, including immigrants and international students, face unique considerations when opening a Roth IRA. Your visa status, tax residency, and income source play a significant role in determining eligibility.

Student Visa Holders (F1, J1)

International students on F1 or J1 visas can contribute to a Roth IRA if they have US-sourced earned income, such as from on-campus jobs, internships, or Optional Practical Training (OPT). However:

• Taxable Income Requirement: Non-tuition stipends or fellowships may count as earned income if reported as taxable on Form 1040NR.
• Substantial Presence Test: F1 students are exempt from counting US presence for the first five years, meaning they file as nonresident aliens unless they meet other residency criteria. This doesn’t preclude opening a Roth IRA but affects tax filing.

OPT and H1B Visa Holders

• OPT: Students on OPT often have US-sourced income from internships or jobs, making them eligible for Roth IRA contributions. They typically file as nonresident aliens unless they pass the substantial presence test.
• H1B: H1B visa holders working for US employers are usually considered resident aliens after meeting the substantial presence test, making them eligible for Roth IRAs with fewer restrictions.

Green Card Holders

Green card holders are treated as US residents for tax purposes, enjoying the same Roth IRA eligibility as US citizens. They can contribute up to the annual limit as long as they have sufficient US earned income and meet MAGI thresholds.

Common Ineligibility Reasons

• No US Earned Income: If you only have foreign income (e.g., working remotely for a non-US employer), you cannot contribute to a Roth IRA.
• Exceeding MAGI Limits: High earners, even with US income, may be phased out of eligibility.
• Lack of SSN/ITIN: Without a valid tax ID, you cannot open an account.

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How to Open a Roth IRA as a Foreigner (Step-by-Step)

Opening a Roth IRA as a non-US citizen is straightforward if you meet the eligibility criteria. Follow these steps:

1. Confirm Tax Residency Status
   Determine whether you’re a resident or nonresident alien using the IRS substantial presence test or your green card status. This affects how you file taxes and report contributions.
2. Obtain an SSN or ITIN
   If you don’t have an SSN, apply for an ITIN through IRS Form W-7. You’ll need to provide documentation, such as a passport, and may need to file a tax return simultaneously.
3. Choose an Eligible Brokerage
   Select a brokerage that accepts non-US citizens and supports online Know Your Customer (KYC) processes. Popular options include Fidelity, Charles Schwab, and Vanguard (see below for details).
4. Open the Account
   • Provide your SSN or ITIN, US address (or a trusted US contact address for expats), and personal details.
   • Designate the account as a Roth IRA during setup.
   • Fund the account with US-sourced earned income only.
5. Make Contributions
   Contribute up to $7,000 in 2025 ($8,000 if 50 or older), ensuring contributions don’t exceed your US earned income. Contributions can be made until the tax filing deadline (typically April 15, 2026, for 2025 contributions).
6. Monitor Limits and File Taxes
   Track your MAGI to ensure compliance with contribution limits. File US taxes (Form 1040 for residents, Form 1040NR for nonresidents) and report contributions accurately.
   

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Use Case Examples

• Digital Nomad: A freelancer on an H1B visa earning $50,000 from US clients can contribute up to $7,000 to a Roth IRA, provided their MAGI is within limits.
• New Immigrant: A green card holder with a $60,000 US salary can open a Roth IRA and contribute the full $7,000, benefiting from tax-free growth.
• Student with Job: An F1 student earning $10,000 from OPT can contribute up to $7,000, assuming they file taxes correctly.

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Best Roth IRA Accounts for Non-US Citizens in 2025

Choosing the right brokerage is critical for non-US citizens, as some platforms have restrictions or high fees. Here are the best Roth IRA accounts for 2025, based on accessibility, fees, and international support:

1. Fidelity
   
   • Why Choose It: No minimum balance, $0 commission on US stocks/ETFs, and an easy-to-use online platform.
   • Best For: Beginners and those with smaller budgets.
   • International Support: Accepts ITINs and non-US addresses for some accounts.
2. Charles Schwab
   
   • Why Choose It: Robust international support, $0 commissions, and 24/7 customer service.
   • Best For: Expats needing global account access.
   • International Support: Allows foreign addresses and has dedicated expat services.
3. Vanguard
   
   • Why Choose It: Low-cost index funds and ETFs, ideal for long-term, passive investing.
   • Best For: Investors focused on low fees and diversification.
   • International Support: Requires a US address but accepts ITINs.
4. Betterment
   
   • Why Choose It: Robo-advisor with automated portfolio management, low fees (0.25% annually), and no minimum balance.
   • Best For: Beginners or those who prefer hands-off investing.
   • International Support: Accepts ITINs but may require a US address.

Selection Criteria

• No Citizenship Requirement: All listed brokerages allow non-US citizens with an SSN or ITIN to open accounts.
• Online KYC: Platforms support digital verification, critical for non-residents or students.
• Low Fees: $0 commissions and low expense ratios ensure cost-effective investing.

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Mistakes to Avoid When Opening a Roth IRA as a Non-Citizen

Non-US citizens must navigate unique challenges to avoid costly errors:

1. Contributing Without US Earned Income
   Contributions must come from US-sourced earned income. Using foreign income or non-earned income (e.g., gifts) can lead to a 6% penalty on excess contributions until corrected.
2. Using Foreign Income
   Income earned abroad (e.g., remote work for a non-US employer) doesn’t qualify for Roth IRA contributions, even if reported on a US tax return.
3. Ignoring FATCA or Tax Treaty Implications
   The Foreign Account Tax Compliance Act (FATCA) requires reporting of foreign financial assets. Some countries’ tax treaties may not recognize Roth IRAs’ tax-free status, leading to double taxation on withdrawals.
4. Not Reporting Contributions Properly
   Nonresident aliens must report contributions on Form 1040NR. Failing to do so can trigger IRS audits or penalties.

FAQ – Roth IRA for Non-Residents & Foreign Nationals

Can I open a Roth IRA on a student visa?
Yes, if you have US-sourced earned income (e.g., from OPT or on-campus work) and an SSN or ITIN. Ensure your MAGI is within IRS limits.

Do I need a green card?
No, a green card isn’t required. Nonresident aliens with US earned income and an SSN/ITIN can open a Roth IRA.

What happens if I leave the US?
You can keep your Roth IRA, but you can’t contribute without US earned income. Withdrawals may be subject to taxation in your home country, depending on tax treaties.

Is a Roth IRA taxed in my home country?
Some countries don’t recognize Roth IRAs’ tax-free status, potentially taxing withdrawals. Check your country’s tax treaty with the US or consult a cross-border tax advisor.

Final Thoughts – Is a Roth IRA Worth It for Non-Citizens?

For non-US citizens, a Roth IRA can be a valuable tool for building long-term, tax-free wealth, especially for immigrants, green card holders, or temporary workers planning to stay in the US. The ability to withdraw contributions anytime without penalty offers flexibility, while tax-free growth benefits those expecting higher tax brackets in retirement.

However, non-US citizens must carefully assess their situation:

• Eligibility: Ensure you have US-sourced earned income and meet MAGI limits.
• Tax Implications: Be aware of potential double taxation in your home country if you leave the US.
• Long-Term Strategy: A Roth IRA is ideal for younger investors or those in lower tax brackets now, as tax-free withdrawals maximize savings later.

If you expect to be in a lower tax bracket in retirement or plan to leave the US permanently, a Traditional IRA might be better due to its upfront tax deductions. Consult a tax advisor to align your choice with your financial goals and residency plans.

By understanding the rules and choosing the right brokerage, non-US citizens can leverage Roth IRAs to secure their financial future, whether they stay in the US or retire abroad.