Save time with our cheat sheets, fact sheets, checklists & books!

February 23, 2009

Guardian IRA



Guardian IRA- also know as Minor IRA.

IRA established and maintained on behalf of an individual who is defined as a minor under state law, or anyone who lacks the capacity to act on his or her own behalf.   Minors may be under the ages of 18 to 21, depending on the state.

The IRA is maintained in the name and tax identification number (TIN) of the minor. The guardian/custodian’s name is also typically included in the account registration with a designation of their relationship to the account. For example:

IRA FBO Jane Smithe
Mary Jones(Custodian)
ABC Company as Custodian.

The documents used to establish the account is completed and signed by the custodian , who also handles all transactions and provide any required authorizations relating to the IRA

Upon reaching the age of majority, as defined by the state, the IRA owner is required to complete a new set of paperwork, to establish him/herself as the authorized signatory of the account.  The name of the custodian is then removed from the account registration.


Referring Cite

IRC § 408(a),  IRC § 408A , Treas. Reg. Sec. 1.408A-3, Q&A 4,

Additional Helpful Information

  • The compensation of the child for the taxable year for which the contribution is made must satisfy the compensation requirements that apply . This includes having eligible compensation, as well as not exceeding the income limits that apply to Roth IRAs
  • The contribution limitations apply to the minor
  • Custodial accounts are also established under SEP IRAs, SIMPLE IRAs and other employer-sponsored plans for participants who are minors or lack the capacity to act on his or her own behalf.

Keep Learning

Qualified Charitable Distribution (QCD)

Definition A distribution that is excludable from the distributee’s income, as a result of meeting the following requirements: It is made after the distributee reaches

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Catch-up Contribution

Definition An additional contribution that can be made to a retirement plan by a participant who is at least age-50 by the end of the

Be among the first to know when

IRA Rules