@jyeh74 wrote:
@macuser_22 According to this link and speaking to tax folks, a parent can contribute and match the child’s earned income. So if a child makes $1500 a year, a parent can contribute $1500 into the custodial Roth IRA. So total, they can put $1500 + $1500 = $3000 into the custodial Roth IRA. So yes, a parent can contribute to a child’s Roth IRA. And no, it doesn’t have to be shown under a W2. Earned income can be cash from babysitting or household chores.
https://www.consumerreports.org/retirement-planning/give-the-gift-of-a-roth-ira-for-the-holidays/
Did you read that link? It does NOT say you can match the income. It says:
The child needs to have earned income. The IRS is fine with parents and grandparents (and anyone else) giving someone the money to contribute to a Roth IRA. In 2019 the maximum contribution rises to $6,000.
The only catch is that the recipient must have earned income that is at least equal to the amount contributed. So if a child made $1,500 this year, you could give her $1,500 toward a Roth IRA. “Babysitting, lifeguarding, mowing lawns are fine,” Berno says. “The only rule is that it has to be earned income, not investment income.”
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
