Back Door Roth IRA for United Pilots

The Backdoor Roth IRA for United Airlines Pilots: A 2026 Guide

For a downloadable flow chart to help you navigate these rules, see our resources libary.

If your PRAP is full and you’re wondering where else to put money in a tax-advantaged way, this post is for you.

Every year I get the same question from United Airlines pilots — usually mid-year, after the PRAP contributions have hit their limit and the paychecks stop showing deductions. The question is: “Now what?”

The answer, for pilots above certain income thresholds, is non-deductible Traditional IRA contributions converted to a Roth IRA. It’s commonly called the backdoor Roth — and when done correctly, it’s one of the most effective pieces of United Airlines pilot tax planning available to you.

Here’s exactly how it works.

Can Any Pilot Contribute to a Traditional IRA?

Yes. No exceptions.

It doesn’t matter if you’re a senior captain earning $400,000 a year. You can still make a Traditional IRA contribution. The question is whether that contribution is deductible — and for most United pilots, it won’t be, because the IRS phases out deductibility for people covered by an employer retirement plan (which you are — you have a PRAP).

For 2026, the Traditional IRA deductibility phases out at $81,000–$91,000 for single filers and $129,000–$149,000 for married filing jointly. Most senior pilots are well above that.

But here’s the key: you can still contribute even if it’s not deductible. You just don’t get the upfront tax break.

What About a Direct Roth IRA Contribution?

Direct Roth IRA contributions have their own income limits. For 2026:

•  Single filers: Phases out $153,000–$168,000

•  Married filing jointly: Phases out $242,000–$252,000

Most senior United captains are above these limits, which means you can’t contribute to a Roth IRA directly. That’s where the backdoor strategy comes in.

2026 IRA Contribution Limits

Before we get into the mechanics, here are the 2026 numbers:

•  Under age 50: $7,500 per person

•  Age 50 or older: $8,600 per person ($7,500 + $1,100 catch-up)

This limit applies across all your IRAs combined — Traditional and Roth. You can’t contribute $7,500 to each.

Your spouse has their own separate IRA limit. If your spouse doesn’t have earned income, a spousal IRA contribution may still be available.

The Strategy: Non-Deductible Contribution → Roth Conversion

Here’s the three-step play:

Step 1 — Contribute to a Traditional IRA with after-tax dollars. You’re not getting a deduction, so this is after-tax money going in. No income limit applies to making the contribution itself.

Step 2 — Convert the Traditional IRA balance to a Roth IRA. Because the money was already after-tax when it went in, the conversion is not a taxable event.

Step 3 — Let it grow tax-free. Money in the Roth grows tax-free. Qualified withdrawals in retirement are tax-free. You can access the principal at any time without penalty.

That’s the full loop. It’s why this is called the backdoor Roth — it’s a legal workaround for pilots above the Roth IRA income limits.

The Pro-Rata Rule: What Trips Most People Up

Here’s where United Airlines pilot tax planning for Roth conversions gets more complicated.

The IRS has a rule called the pro-rata rule. When you convert to Roth, the taxable vs. non-taxable portion of the conversion is calculated proportionally across all of your Traditional IRA balances — not just the account you’re converting from.

Example: Say you have a $100,000 Traditional IRA from an old rollover (pre-tax money). You add $7,500 of non-deductible contributions. Total IRA balance: $107,500.

Your non-deductible portion is only 7% of the total. So when you convert that $7,500 to Roth, only about $523 of the conversion is tax-free. The other $6,977 is taxable income.

That’s not what you were going for. It defeats the strategy.

The Solution: Roll Your Traditional IRA Into the PRAP

Here’s where United Airlines pilots have a meaningful advantage over most investors.

The IRS does not count 401(k) balances in the pro-rata calculation. Only Traditional IRA balances count.

The PRAP accepts incoming IRA rollovers — which means you can roll your Traditional IRA balance directly into your PRAP. Once that money moves into the PRAP, it’s out of the IRA world entirely.

Now your Traditional IRA balance is $0.

You make the $7,500 non-deductible contribution.

You convert it to Roth.

100% of that conversion is tax-free.

If your IRA is at Schwab, this process is especially straightforward since the PCRA (the self-directed brokerage window inside the PRAP) is also at Schwab. Call the PRAP Service Center and they’ll walk you through the rollover form.

Note: Not all employer plans accept incoming IRA rollovers. The United PRAP does — which is worth knowing.

A Few More Things to Know

Your spouse. The pro-rata rule applies to their IRA balances separately. If your spouse has a pre-tax Traditional IRA and no employer plan to roll it into, part of their conversion will be taxable. Look at their full IRA picture before running the strategy for them.

Form 8606. Every year you make a non-deductible Traditional IRA contribution, you must file IRS Form 8606 with your taxes. This tracks your after-tax basis in the IRA. If you lose those records, you could end up paying taxes on money that was already taxed. Your CPA should handle this — but confirm it’s being filed.

Do you have to wait before converting? No. Since the Tax Cuts and Jobs Act of 2017, there is no mandatory waiting period between making the contribution and converting to Roth. Most advisors and CPAs are converting immediately. Check with your CPA on timing preference, but the immediate conversion is standard practice.

The 5-Step Summary

1. Confirm your income is above the Roth IRA direct contribution limit ($242,000+ for MFJ)
2. Roll any pre-tax Traditional IRA into your PRAP to zero out the pro-rata problem
3. Make a non-deductible Traditional IRA contribution — $7,500 if under 50, $8,600 if 50 or older
4. Convert the Traditional IRA to a Roth IRA
5. File IRS Form 8606 with your taxes

The strategy isn’t complicated once you understand the mechanics. The pro-rata rule is the piece that bites people who try to do it without the full picture — and the PRAP rollover is the move that solves it for United pilots specifically.

Questions?

If you’re a United Airlines pilot and want to talk through how this fits your specific situation, reach out at unitedwealthmanagement.com.

United Wealth Management is a fee-only fiduciary RIA specializing in financial planning and investment management exclusively for United Airlines pilots. The founders of United Wealth Management, Dan Lohmar and Alan Bewley,  are both active United pilots.