@dmertz Thank you, I forgot about the Kiddie tax.
@IrvingUser Unearned income by your child is taxed at a higher rate. Even if you don't claim your child as a dependent, they are subject to the kiddie tax until they turn 24 (in most situations). It probably doesn't make financial sense for your child to think about a Roth conversion until they turn 24. However, their ongoing contributions should be made to a Roth IRA, not a traditional IRA..
https://www.irs.gov/taxtopics/tc553
Because of the kiddie tax, and for anyone else reading this in the future, it is highly recommended that if a child is working and wants to contribute to a retirement account (since their living expenses are covered by their parents), they should contribute to a Roth IRA. They will pay regular income tax on their wages, which will already be zero or less than 10% for most kids with part-time jobs. If the child contributes to a tax-deductible traditional IRA, the tax savings will be minimal and the later tax consequences of doing a Roth conversion or withdrawal will be much more burdensome than the tax deduction.
As noted, if this IRA was inherited, it can't be converted.
