Roth IRA for teenager & dependent

Greetings.

I am fortunate to have a 16 year old son who is very responsible and is about to start his first job (W-2) with a summer amusement park. I want him to start a Roth IRA for him and am willing to make the contributions from my own funds. I am trusting that he will not withdraw the money later to but a sports car.

I am separated from my spouse per a legal agreement with a divorce depending and I am eligible to file as single head of household. Our agreement also states that I can claim the three children as dependents. But my AGI is so high I only received a very small child tax credit. So, what should I consider about the best strategy for a RIRA for him? Should I let him file separately and not as my dependent so that he may be able to claim a retirement savings credit too? Or should I keep him as a dependent on my return? What variables/impacts should also be considered?



He can certainly contribute to a Roth IRA, but it appears he would not qualify for a Savers Credit no matter how he files. For the Saver’s credit in 2012, the taxpayer must:
1) Be born PRIOR to 1/2/1995
2) Not be a full time student, defined as being a full time student in any part of 5 different months of the calendar year.

You are supposed to claim him on your return unless he contributed more than half his support.



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