The benefits belong to the children, even though you receive them on their account. Thus, whether they are taxable to them depends on their income, and they are subject to the same tax rules that apply to retirees receiving Social Security benefits. Because of the income limits that apply, likely they are tax free to your children.
A credit for income taxes paid to a foreign country or U.S. possession. 401(k) plan. A deferred pay plan, authorized by Section 401(k) of the Internal Revenue Code, under which a percentage of an employee’s salary is withheld and placed in a savings account or the company’s profit-sharing plan. Income accumulates on the deferred amount until withdrawn by the employee at age 59?