"unless the payments are for work other than in a trade or business and are less than $50 in the quarter"
If the children are being paid $6,000 per year, then that is more than $50 in a quarter. Also, in order for the IRA to register, there has to be earned income of $6,000 shown on a tax return. The proper way is by Form W-2. They are being designated as household workers.
Should they choose to issue the 1099-NEC, the contribution will be limited by one half the SE tax that they will pay.
