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Trump Accounts were introduced as part of the One Big Beautiful Bill passed in July 2025
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Trump Accounts are intended to help children to start investing early and benefit from long-term equity appreciation
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The United States Treasury will add $1,000 to Trump accounts for babies born between 2025 and 2028
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When the child turns 18, the Trump Account generally follows Traditional IRA rules
What is a Trump Account?
Trump Accounts were established as part of the One Big Beautiful Bill (OBBBA) to create a tax-advantaged savings and investment account for children under the age of 18. The parent or guardian open and manage the account while the child is considered the account owner. To be eligible, the child must be a U.S. citizen and the child as well as both parents or guardians must have a social security number.
Who can Contribute to a Trump Account?
Children born between January 1st, 2025 and December 31st, 2028 are eligible for a one-time $1,000 contribution from the United States Treasury. Parents, guardians, relatives, employers, and other individuals can contribute up to a combined $5,000 annual limit.
Employers can contribute up to $2,500 for an employee or the employee’s dependent however employer contributions count towards the $5,000 annual limit. The $1,000 one-time federal contribution does not count against the $5,000 limit.
Additionally, charities may also make qualified contributions to Trump Accounts if given a qualified class of account beneficiaries. For instance, on December 2nd, 2025, the Michael and Susan Dell Foundation announced they will pledge $6.25 billion to seed 25 million Trump Accounts with $250 for children born before 2025 that do not qualify for the federal contribution. Philanthropic contributions do not count towards toward the $5,000 limit.
What can a Trump Account be Invested in?
Trump Accounts must be invested in certain exchange-traded funds or mutual funds that track an American equity index. For instance, an exchange-traded fund that tracks the S&P 500 would be eligible to invest in.
What Happens when the Child becomes 18?
Upon age 18, the Trump Account generally follows Traditional IRA rules. The child is only able to contribute to the account after age 18 and must have earned income to contribute to the account.
What are the Distribution Rules for a Trump Account?
Children under the age of 18 are not able to take distributions under any circumstances. Once the child turns 18, the Trump Account generally follows Traditional IRA rules. If the beneficiary takes a distribution before age 59 ½ , a 10% penalty will apply.
When will Trump Accounts Become Available?
Trump Accounts will not be available until July 4th, 2026. The Department of the Treasury as well as the Internal Revenue Service will be providing further guidance on Trump Accounts between now and then.
Parents and guardians will be able to file a new online form with the Internal Revenue Service (Form 4547) to establish a Trump Account.
Conclusion
While details of Trump Accounts are still being sorted out, Trump Accounts are likely to provide meaningful savings and growth potential for young children. Incorporating Trump Accounts into financial plans will be a key component to grow legacy value for the next generation.