Beginning July 4, 2026, families can begin opening and contributing to a new type of investment account for children known as a Trump Account.
Since these accounts are new, many parents, grandparents, and guardians are asking the same questions: Who is eligible? How do these accounts work? How do you open one?
Here's a quick, educational overview of the program and what families should know about these new federally established accounts.
What Are Trump Accounts?
Trump Accounts are federally authorized investment accounts for children under age 18 with a valid Social Security number. Their purpose is to encourage long-term investing by allowing contributions to grow on a tax-deferred basis.
Rather than holding cash like a traditional savings account, contributions are invested in qualifying low-cost U.S. stock index funds. Until the child reaches adulthood, the account is managed by a parent or legal guardian.
Important Note: Because this is a new federal program, additional guidance and administrative updates may continue to be released.
How Do You Open a Trump Account?
Parents or legal guardians must elect to open a Trump Account for an eligible child by submitting IRS Form 4547.
The election can be made:
- When filing a federal tax return, or
- Through the IRS's secure account portal
$1,000 Federal Government Contribution
Children born between January 1, 2025, and December 31, 2028, may qualify for a one-time $1,000 federal government contribution if all program requirements are met and a Trump Account is properly established.
Who Can Contribute?
Contributions may generally be made by:
- Parents
- Grandparents
- Other relatives
- Friends
- Employers
- Certain charitable organizations
- Certain government entities
Contribution rules vary depending on the source of the funds.
What Are the Contribution Limits?
For 2026 and 2027:
- Up to $5,000 per year may generally be contributed through individual and employer contributions combined.
- Employer contributions are generally limited to $2,500 per year and count toward the annual limit.
- Certain government and charitable contributions may not count toward the annual contribution limit.
Beginning after 2027, annual contribution limits are expected to be indexed for inflation.
What Happens at Age 18?
- The beneficiary assumes control of the account.
- The account generally begins operating under rules similar to a traditional IRA.
- Future contributions and withdrawals become subject to the applicable IRA rules.
Final Thoughts
Trump Accounts introduce a new federally authorized investment option for eligible children. As with any new federal program, guidance and administrative procedures may continue to evolve.
For the latest information, eligibility requirements, and account-opening instructions, visit the official Trump Accounts website.
Sources:
- Trump Accounts
- IRS
Disclosure: This article is provided for educational and informational purposes only and should not be considered tax, legal, or investment advice. Trump Accounts offer tax deferred growth on earnings. Family contributions are made with after tax dollars, and eligible employer contributions may be excluded from the employee’s taxable income. A one time $1,000 federal contribution may be available for eligible children born between 2025 and 2028. Distributions are generally prohibited during the child's growth period and, once permitted, are taxable as ordinary income and may be subject to a 10% IRS early distribution penalty if taken before age 59½. Contribution limits and other restrictions apply, and some rules remain subject to future Treasury and IRS guidance. Consult a qualified tax advisor or financial professional before making decisions.