S-corp IRA Contributions

[nkustura]

I have a client - a single shareholder in an S-corp. He contracted his son for some time in 2011 to do some work and gave him 1099 at the end of the year for the amount he paid him. However, he is listing a deduction for IRA contribution for his son (contractor) and is confident that he can deduct that on his S-corp return.
The only thing I know about and can find everywhere is that S-corp can contribute to employees IRA accounts up to 25% of their salary. I am thinking that he can't have an IRA contribution deduction for contractors.

Any help is greatly appreciated.

Thanks,
nk

[JohnH]

You're right;
your client is wrong.
(and so is his hairstylist)

[Burke]

If he made an IRA contribution out of his business into an account for his son, then he has just given his son additional 1099 income. So, theoretically, he could deduct it. But his son will have to claim it as income. Then the son can deduct it (or not) depending on whether he qualifies.