Can I Open a Roth IRA for My Child?

Yes. You can open a custodial Roth IRA for your child with a provider that offers one. The child owns the account; an adult custodian manages it under the account agreement. The usual non-spousal case uses the child's own eligible compensation: for 2026, total regular Traditional and Roth IRA contributions cannot exceed the smaller of that compensation or $7,500, and Roth income limits can reduce the amount further. A married child filing jointly may instead qualify under the spousal IRA rules below; a parent's income never creates child contribution room. There is no federal IRA minimum age, but lawful work and provider access are separate questions.

The Earned-Income Requirement — What Counts and What Doesn't

Start with your child's own compensation for the contribution year in the usual non-spousal case, not your income as a parent. Then check unused room under the shared IRA limit and the child's Roth income limits. Being your dependent does not by itself prevent a contribution. Income can qualify as taxable compensation even when deductions leave the child owing no federal income tax.

A separate exception for married joint filers. A married child who files a joint return may use a spouse's compensation under the spousal IRA rules, even without compensation of their own. The couple's combined eligible compensation must cover both spouses' total regular Traditional and Roth IRA contributions. Each spouse has a separate IRA and individual annual limit; other regular IRA contributions and Roth income limits still reduce available room. This is not a way to use a parent's income. All contribution and growth examples below use the saver's own eligible compensation, not spousal IRA eligibility. See Publication 590-A, chapter 2, spouse-Roth subsection.

What counts as earned income:

• Eligible wages and tips paid for actual services. Keep the W-2 and other pay records.
• Adjusted net self-employment earnings from a genuine business in which the child's services materially produce income. Generally, start with net business earnings after expenses, then subtract the deductible part of self-employment tax and any applicable deduction for self-employed retirement-plan contributions. Gross customer payments or a Form 1099 amount are not the IRA-compensation amount.

A job name is not an automatic approval. Babysitting, lawn care, tutoring, modeling, acting, or family-business work may produce compensation, but the actual arrangement matters. Check applicable federal and state labor laws, including restrictions on hours and hazardous tasks. No age in this article is a safe harbor for a particular job.

Employee or self-employed? Babysitting and yard work can be household employment rather than a business. The IRS looks at who controls how the work is done; do not automatically put every cash job on Schedule C. IRS Publication 926 explains the distinction.

What does NOT count:

• Allowance for chores like cleaning their own room or normal household tasks.
• Gifts and birthday/holiday money.
• Investment income (dividends, interest, capital gains).
• Inherited money or distributions of trust investment income.
• Social Security survivor benefits.

Documentation matters. Keep dates, tasks, hours where relevant, who paid, amounts received, and business expenses. Keep W-2s and any Forms 1099, but cash payments can still be income when no information form is issued. Report income under the applicable filing rules; a missing form does not make it tax-free.

Payroll tax is a separate check. Social Security and Medicare tax withholding is not a universal condition for IRA eligibility. For example, the IRS exempts certain wages paid to a child under 18 by a parent's sole proprietorship or a partnership in which each partner is the child's parent from those taxes. Other business structures have different rules. See IRS family-employee guidance; an exemption does not excuse real-work, reporting, or labor-law requirements.

Step-by-Step: Opening a Custodial Roth IRA in 2026

1. Confirm compensation and unused contribution room. If the child's own eligible compensation is $200, the child is not using spousal IRA eligibility, no other regular IRA contributions were made for that year, and the Roth income limits do not reduce eligibility, the maximum contribution is $200—not $7,500.
2. Compare providers without assuming one is best. Fidelity, Schwab, and Vanguard offer custodial Roth IRAs on their official pages checked October 7, 2026. Fidelity and Schwab advertise a $0 account minimum; that is not a promise of no fund expenses, transaction charges, or other fees. Compare investment choices, all applicable fees and minimums, and the rules for ending adult custodial authority.
3. Follow the provider's application process. Check who may serve as custodian and what identity information and documents the firm requires. Methods differ: Schwab's current instructions direct applicants to download and mail its custodial IRA application; Vanguard lists an existing Vanguard account, the child's SSN, and date of birth among its requirements. Keep work records even if the provider does not ask for them at opening. Account acceptance is not IRS confirmation of contribution eligibility.
4. Fund it. The cash can come from the child, a parent, or another person. In the usual own-compensation case, the child's eligible compensation supports the room; the deposited dollars need not be the same dollars the child earned. A qualifying married joint filer may use the spousal calculation instead. In either case, the applicable compensation calculation, unused individual annual IRA limit, and Roth income limits constrain the amount; parent income or gift funding does not add room.
5. Choose the holdings deliberately. Check where the deposit lands; adding cash does not necessarily buy investments. Review the available holdings, risks, and expenses against the child's time horizon and cash needs. Market investments can lose value.
6. Handle reporting correctly. The child files Form 1040 only when a filing requirement applies or when filing is useful, such as to claim a refund of withholding. Net self-employment earnings of $400 or more generally trigger a return. A regular Roth contribution is not deducted or claimed on Form 1040; the IRA trustee files Form 5498, using box 10 for the child's Roth contribution. Keep the child's work and contribution records.

The Long-Term Math — What Extra Years Can Do

A Roth contribution does not give the child an income-tax deduction. Its potential advantage is more time for invested money to compound, followed by tax-free qualified withdrawals. Earnings withdrawals generally need both the five-tax-year requirement and age 59½, unless another qualifying condition applies.

Imagine three siblings: Alex contributes on the 14th birthday, Blair on the 25th, and Casey on the 35th. Each uses their own eligible compensation, not spousal IRA eligibility, has unused contribution room for a single $5,000 deposit, and meets Roth income limits. Assume a constant 7% annual return until the 65th birthday, with no fees or withdrawals. These are future-dollar balances, not inflation-adjusted purchasing power, and 7% is an assumption, not a forecast.

Under this constant-return illustration, Alex ends with about 4.1 times Casey's balance and about 2.1 times Blair's balance from the same $5,000 contribution. The difference is time, not a guarantee of market performance.

For a second illustration, assume eight $7,500 deposits made on birthdays 14 through 21, then no further contributions. At that same constant 7% return, the balance on the 65th birthday is about $1.51 million in future dollars. The total deposited is $60,000. This holds the deposit amount flat; it does not predict future IRA limits, returns, or purchasing power. The saver uses their own eligible compensation, not spousal IRA eligibility, with enough compensation, unused IRA room, and Roth income eligibility for each contribution year. Use the Growth Projection tool to explore other assumptions.

Common Mistakes to Avoid

• Relabeling allowance as wages. Ordinary family chores and gifts do not become IRA compensation just because you call the payment a paycheck. Genuine paid services need facts and records to support them; family-business or household-employment arrangements may need professional tax advice.
• Skipping the documentation. For self-employment, keep work, payment, and expense records and reconcile them to Schedule C. Keep any Forms 1099, but do not use a 1099 gross amount as the contribution ceiling.
• Assuming the contribution invests itself. Check whether it is in a settlement position, then make a deliberate allocation choice. Cash and market investments serve different purposes, and an index fund can lose value.
• Assuming one handoff age applies everywhere. The child owns the IRA, but the provider's agreement and applicable state law govern when the adult custodian's authority ends and what paperwork is required. Ask the provider before opening the account and discuss the transition with the child.
• Confusing contributions with the whole balance. Ordinary withdrawals of remaining regular Roth contribution basis are free of federal income tax and the 10% early-distribution tax. Earnings and conversions have different rules; a college-expense exception to the 10% tax does not by itself make earnings income-tax-free. The adult must also act within the minor-account agreement. For a college goal, compare a 529 separately rather than assuming a Roth is the right account for every purpose.

Family Match Strategy — Funding Without Touching the Child's Own Earnings

A family can let the child keep their paycheck or business cash while a parent or grandparent supplies the Roth contribution dollars. In the usual own-compensation case, the child's eligible compensation supports the room—not the source of the deposited cash. A qualifying married joint filer may use spousal IRA eligibility instead; neither route uses a parent's income.

For self-employment, document adjusted net earnings rather than matching gross receipts or a Form 1099 amount. Family funding does not change the applicable own-compensation or spousal IRA calculation, other IRA contributions, individual annual limit, or Roth income rules.

For example, suppose your child has $2,000 of their own eligible wages, is not using spousal IRA eligibility, has no other IRA contributions, and has no Roth income-limit reduction. You can supply $2,000 for the Roth while the child keeps the wages. You and the child cannot each contribute $2,000: the combined $4,000 would exceed this own-compensation example's $2,000 ceiling.