Roth IRA for children

[Guest jperez12]

At what age a child can reasonably earn income from working for his parents?. The IRS did not set up an age limit for a Roth IRA, you just have to have earned income in that year. Your child then could earn $2000 and you could put that whole amount into a Roth IRA. The question again is when can a child start earning income from working for his parents?

[Appleby]

There is no minimum age - they should just be careful about child labor laws...

For example, if the parents have an advertising business, a newborn baby could be employed to advertise products. The compensation, paid to the baby, could be used to make a contribution to an IRA.

[Guest jperez12]

So what of you are not self-employed?. Let's say you are a teacher and your son helps you with grading papers or with entering grades in the computer. At what age a child can be expected to do this type of work and get paid for it without running amock of labor laws?

[John G]

Look at the answers to child IRAs earlier on this site. If a child is copying, cleaning, filing, etc. you can clearly pay for these services and that is earned income. Paying also means paying all of the appropriate employment taxes for the child.

Clearly when a child is 12 or older a stronger case can be made, but an infant that "earns" modeling fees would also be qualified. But, if the work is purely contrived and the payments purely to enable a Roth IRA you have a higher chance of IRS questions. Note, you can do an educational IRA for any child but it is currently limited to $500/yr.

[david rigby]

Earlier discussion:

http://benefitslink.com/boards/index.php?showtopic=9284

http://benefitslink.com/boards/index.php?showtopic=8885

http://benefitslink.com/boards/index.php?showtopic=7683

http://benefitslink.com/boards/index.php?showtopic=7656

[John G]

Another short citation on children and Roths

http://detnews.com/2000/business/0007/04/b10-85589.htm

Thanks for shortcuts to prior references added by Pax.