First off, review this list of answers and accept how incredible this idea is, to both fund college, make your kids earn it, and do it all in a tax-advantaged way: Yes, income earned in the home can be put into a child’s Roth (within the rules) Yes, the income and savings can be used for college, or really any major life purchase Yes, it is a relatively easy strategy if you follow the below tips If you are raising your kids like I am mine, the early years are an important time to ingrain a set of good money habits that hopefully they keep for the rest of their lives. I require my kids to put 10% of any money they earn into the following categories, college, giving, and taxes (back to the family). Meaning they only ever get to spend about 70% of their income. This has been met with several comments ranging from “awesome” to “cruel”. But for my kids, it’s all they know. They don’t negotiate or object to taxes because it has always been how they get paid. I hand them a dollar and take a dime back instantly. It’s visceral, and habitual at this point.  I feel money is a difficult idea if children are never given the opportunity to handle it, hold it, and lose it. When it comes to teaching financial lessons, setting a good parental example is important, but actually giving the child some experience making wise financial decisions is essential. This includes both giving the child decision-making authority with their own money and giving the child the means to earn money outside of or instead of an allowance. This is where the Roth comes into play, and your opportunity to hire your child… This is an open platform to pay your children in a way that makes sense for your family. And the best part is that this payment can be counted as earned income and thus qualifying for Roth eligibility. But there are some rules you need to follow and this article will walk parents through the right way to keep the Roth eligibility intact.  You will want to make it clear, under which IRS designation you want to use. The two options are as a self-employed independent contractor or a household employee of yourselves.  This all might sound silly, hiring your child as a contractor, but the benefits make it worth it. I promise. And like taxing your children, it might only sound silly because it’s new, but your kids won’t know this isn’t normal and will just roll with it. The Independent Contractor Route… If you decide that your child is an independent contractor, then all of the child’s earnings must be reported as Self-Employed on Schedule C.  So it should be noted that if their net earnings from this kind of self-employment are more than $400, the child would need to pay self-employment tax (Medicare and Social Security) on Schedule SE. That’s an important threshold to be aware of.  Quite possibly the best part of choosing the independent contractor route is that your child could work for many different families. So if they are routinely engaging in neighborhood childcare, lawn maintenance, or other jobs in your community, this might be the most open path.  Let’s be clear though, this route still requires that the child follow the child labor laws. But these laws are reasonable restrictions for most circumstances.  The first law of note is the age restrictions on certain occupations. If your child is under 14, then the list of potential occupations is limited to: delivering newspapers to customers; babysitting on a casual basis; work as an actor or performer in movies, TV, radio, or theater; work as a homeworker gathering evergreens and making evergreen wreaths; and work for a business owned entirely by your parents as long as it is not in mining, manufacturing, or any of the 17 hazardous occupations. This is the sweet spot for any family that has 1or more family businesses.  At age 14 and above the universe of employment can expand to include: intellectual or creative work such as computer programming, teaching, tutoring, singing, acting, or playing an instrument; retail occupations; errands or delivery work by foot, bicycle, and public transportation; clean-up and yard work which does not include using power-driven mowers, cutters, trimmers, edgers, or similar equipment; work in connection with cars and trucks such as dispensing gasoline or oil and washing or hand polishing; some kitchen and food service work including reheating food, washing dishes, cleaning equipment, and limited cooking; cleaning vegetables and fruits, wrapping sealing, and labeling, weighing pricing, and stocking of items when performed in areas separate from a freezer or meat cooler; loading or unloading objects for use at a worksite including rakes, hand-held clippers, and shovels; 14- and 15-year-olds who meet certain requirements can perform limited tasks in sawmills and woodshops; and 15-year-olds who meet certain requirements can perform lifeguard duties at traditional swimming pools and water amusement parks. At age 16 or 17, almost any job that is not expressly prohibited (like alcohol serves or licensed operations) becomes available to children.  For more details on the standing labor laws and how they pertain to children consult YouthRules.Gov. The Household Employee Route… This is likely the more common route, and requires less diligence in what the job is, and the laws that protect it. There are two general guidelines you still note before you take this route:  Your list of jobs allowed under child labor laws expands significantly as you are allowed to “work for a business owned entirely by your parents as long as it is not in mining, manufacturing, or any of the 17 hazardous occupations” at any age. The wages are exempt from FICA taxes if they are working for a business owned solely by their parent(s). When determining if this employment is suitable this is the question you need to ask yourself: Does the employer (you) have control