@Coolkids007 and @MaryM428 and @npierson7 and @npierson777
Please read this https://www.irs.gov/publications/p926#en_US_2020_publink100086722
It states
Do You Have a Household Employee?
You have a household employee if you hired someone to do household work and that worker is your employee. The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your employee, it doesn't matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. It also doesn't matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job.
Example.
You pay Betty Shore to babysit your child and do light housework 4 days a week in your home. Betty follows your specific instructions about household and child care duties. You provide the household equipment and supplies that Betty needs to do her work. Betty is your household employee.
Household work.
Household work is work done in or around your home. Some examples of workers who do household work are:
Babysitters,
Butlers,
Caretakers,
Cooks,
Domestic workers,
Drivers,
Health aides,
House cleaning workers,
Housekeepers,
Maids,
Nannies,
Private nurses, and
Yard workersHousehold work doesn't include services performed by these workers unless the services are performed in or around your private home. A separate and distinct dwelling unit maintained by you in an apartment house, hotel, or other similar establishment is considered a private home. Services not of a household nature, such as services performed as a private secretary, tutor, or librarian, even though performed in your home, aren't considered household work.
Workers who aren't your employees.
If only the worker can control how the work is done, the worker isn't your employee but is self-employed. A self-employed worker usually provides his or her own tools and offers services to the general public in an independent business.
A worker who performs child care services for you in his or her home generally isn't your employee.
If an agency provides the worker and controls what work is done and how it is done, the worker isn't your employee.
@npierson7 @MaryM428 Nowhere does it state that household chores performed by children and paid by parent, are not counted as earned income for purposes of contributing to a Roth IRA. Nowhere does it state that in order for it to be counted as earned income, there must be a W2 issued. Refer here https://www.irs.gov/publications/p926#en_US_2020_publink100086734
The only thing that it states is that you do not pay employment taxes to:
Your spouse,
Your child under the age of 21,
Your parent (see Wages not counted , later, for an exception), or
Any employee under the age of 18 at any time in 2020 (see Wages not counted , later, for an exception).
Household work does qualify as earned income.
https://www.marottaonmoney.com/funding-a-3-year-olds-roth-ira/
