Trump Accounts: What You Need To Know

Trump Accounts are a new tax-deferred savings and investment tool for children, created under the One Big Beautiful Bill Act (OB3 Act) and added to the tax code as new IRC §530A. With IRS guidance in Notice 2025-68, families should begin evaluating whether opening a Trump Account fits into their long-term tax strategy.

If you have children or grandchildren, now is the time to decide whether opening a Trump Account makes sense for your family.

What Is a Trump Account?

A Trump Account is a special type of traditional IRA-like account for children, designed to help them build long-term savings starting early in life. The account is established for the exclusive benefit of a child and has unique rules that apply until the child turns 18 (referred to as the growth period).

The account grows tax-deferred and is intended to support future milestones like education, home ownership, or other adult financial goals.

Who Can Open a Trump Account?

An account can be opened for a child who:

• Is under age 18 at the end of the year the election is made

• Has a valid Social Security number before the election date

How Do You Open a Trump Account?

The process starts when an authorized individual (typically a parent or legal guardian) files Form 4547, Trump Account Election(s) with their 2025 tax return, or through an online portal that will be available by summer of 2026 on the website trumpaccounts.gov.

Note: Form 4547 makes the election and starts the registration process. The actual account is then activated/opened with an approved trustee or custodian.

The $1,000 Government Contribution (Pilot Program)

Under a Treasury pilot program, the government will contribute $1,000 to a Trump Account for U.S. citizens born:

• After December 31, 2024, and

• Before January 1, 2029

This contribution is tax-free, does not count towards annual contribution limits, and is available if elected as part of the Form 4547 election/registration process.

Investment Rules During the Growth Period

Until the child turns 18, Trump Accounts follow specific investment and contribution rules designed to promote long-term growth while limiting risk.

·         Investments must be in low-cost mutual funds or ETFs tracking U.S. stock indexes

• Annual investment fees are capped at 0.1%

• Distributions are generally not allowed during this period (with limited statutory exceptions)

• Annual contribution limit is $5,000 (indexed for inflation starting in 2027) though some “exempt” contribution types may also exist

• Contributions are not deductible, but earnings grow tax-deferred

When Can You Contribute?

No contributions are allowed before July 4, 2026. After that date, contributions may come from:

• Parents, family members, or the child itself

• Employers (up to $2,500 per employee under new §128 plans)

• Government or nonprofit programs

• Qualified rollovers from other Trump Accounts

What Happens When the Child Turns 18?

Once the growth period ends, the Trump Account is expected to continue as a Trump Account but following standard IRA rules going forward. Final regulations are pending to confirm these items.

• Roth conversions may begin

• Normal IRA distribution rules apply

• Required minimum distributions (RMDs) may eventually apply

• A multi-year Roth conversion strategy may help minimize future taxes

How to Open a Trump Account (Step-by-Step):

Step 1: Determine Eligibility

·         Confirm the child meets age and SSN requirements.

·         Confirm citizenship eligibility and birth year for $1,000 pilot contribution eligibility.

Step 2: File Form 4547

This form makes the election (and, if eligible, elects the $1,000 pilot contribution).

·         The authorized individual or tax preparer files Form 4547 with their 2025 tax return OR

·         The authorized individual files Form 4547 separately through the online portal

Step 3: Account Activation

After the election is accepted, the Treasury provides instructions to activate the account with an approved trustee or custodian.

Step 4: Fund the Account (Starting July 2026)

Once contributions are allowed, families can begin funding the account under the annual limits.

Many families choose to have their tax professional handle this process to ensure:

• The election is filed correctly

• The pilot’s contribution is not missed

• The account is coordinated with other planning tools (529s, Roth IRAs, etc.).