Your child can only contribute to an IRA if they have compensation from working. Working for your company would satisfy that rule, provided you follow the other rules as described above. I also agree that a W-2 would be better than a 1099-NEC; however, a 1099-NEC would also work. (But she will have to pay self employment tax, and her compensation is 92% of her self-employment income.
Whether the IRA is in her name, or a trust, or a custodial account, raises legal issues that I can't comment on.
