it is my understanding that a child must have earned income to contribute to a custodial IRA but you can report the income on your tax return as a kiddie tax.
You may first try to file a kiddie tax return according to the instructions in this Turbo Tax link. If you are unable to file, then your child can file their own tax return but state that they are a dependent of someone else. According to the link:
- Open or continue your return if you don't already have it open.
- Search for child income and select the Jump to link in the search results.
- Answer Yes to both Any Child's Income? and Child Required to File?
- Select Continue on the Reporting Your Child's Income screen.
- We'll ask you a series of questions to determine if the income can be included on your return or if your child needs to file their own return.
- Write back if you have additional questions.
- The link you mention above cannot be used as a reference in our answers because it is from an unreliable source.
[Edited 03-09-2021|07:33 PM PST]
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