simple 401k eligibility

[Guest nipa]

Can the owner of a S-Corp who currently pays her children (under age 18) as employees include them in the Simple 401k?

[Gary Lesser]

Yes, but keep in mind that the qualification of the plan may depend on the true nature of the relationship as employer/employee. If the W-2 compensation is reasonable, there should be no problem. Banks, but not all financial institutions will permit the establishment of an account for a minor because of "recission" issues (which don't generally occur in FDIC insured accounts, and so on).