As long as your child has earned income, no matter the age, he can contribute to a Roth IRA. If he is a minor, you will have control until the age of majority (18 in most states). It’s kind of like a custodial account…but not a custodial account. You can set up a Roth for your child at any online brokerage and you can fund his IRA with a gift of your own money, which is a good estate planning move for you. Some parents choose to match any contributions their children make, which is a good way to encourage children to save.
Your child can contribute the lesser of $5,500 or her earned income (2016). She doesn’t just have to work for you (think dog-walking, mowing yards, washing cars, etc.); all earnings count toward earned income for Roth purposes. If you pay her $2,000 from your business this year and she makes $1,000 babysitting, she can put $3,000 in a Roth IRA and let the tax-free growth and earnings begin.
You’ll need to file an income tax return reporting your child’s income. If your child works in your unincorporated business, she will not be liable for any FICA taxes or income taxes until she earns more than her standard deduction as long as she is under age 18. Check your state and local laws for other requirements such as licensing, workmen’s comp, and unemployment.