@jyeh74 wrote:
It says “match” here also
www.marottaonmoney.com/fund-your-childs-roth-[product key removed]e/
Roth IRA Funding
“Once your child has earned the income, then your child is eligible for an amount of Roth IRA funding. There are many ways for you to get money into the Roth account.
First, the money that is contributed does not need to be the very same money they earned. Unlike a 401(k) plan, which requires salary deferrals in order to fund, you or anyone else can fund your Roth IRA with any money.
The child can contribute. Parents can contribute. Grandparents can contribute. A random friend can contribute. The only hitch is that you are limited in how much you can contribute up to their earned income or this year’s IRA contribution limit whichever is smaller.
If you want to maximize the amount that is put in while still giving the child a choice, one clever suggestion is that you or a grandparent could offer a Roth contribution match as gift. For example, every dollar the child contributes, you promise to also contribute one dollar. In this way, the child can save half of all their earnings as spending money while still getting the full allowable amount into their Roth IRA to grow tax-free.”
So yes you can match what the child earns. They earn $2000, you can match $2000 and contribute $4000 total. Unless I’m totally misunderstanding and it’s only $2000.
"So yes you can match what the child earns. They earn $2000, you can match $2000 and contribute $4000 total. Unless I’m totally misunderstanding and it’s only $2000"
You are reading what is not there.
It said: "The only hitch is that you are limited in how much you can contribute up to their earned income"
Which is correct. If the child earned $3,000 then the *child* does not need to contribute *that* $3,000 to the child's IRA, someone else can contribute $3,000 to the IRA, but the total contribution to the IRA cannot exceed $3,000.
That is poorly written, but does not mean that $6,000 can be contributed, which would violate tax law.
**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.**
