A new savings and investment option is now available for families with children: Trump Accounts.
While the name may be getting attention, the account itself is something many parents, grandparents, and business owners should understand from a tax and financial planning perspective. These accounts were created as a new type of individual retirement account for eligible minors under the Working Families Tax Cuts enacted on July 4, 2025. The Treasury Department officially launched full account access in July 2026.
For families, this may represent another way to start saving early for a child’s future. For employers, it may also become a new type of family-focused benefit to consider.
What Is a Trump Account?
A Trump Account is a tax-advantaged investment account that can be opened for an eligible child under age 18 who has a valid Social Security number. According to the IRS, the account is for a child who has not turned 18 before the end of the calendar year in which the election is made.
The account is designed to help families begin long-term investing for children early in life. During the child’s younger years, the account is generally managed by a parent or custodian. Once the child turns 18, the account generally begins to follow traditional IRA rules.
Who May Qualify for the $1,000 Federal Contribution?
One of the most important features of the program is the one-time $1,000 federal pilot program contribution.
Eligible children must generally meet the following requirements:
- Be born between January 1, 2025 and December 31, 2028
- Be a United States citizen
- Have a valid Social Security number
- Have a Trump Account election properly filed
The IRS has stated that the $1,000 pilot program contribution is available for eligible children born during calendar years 2025, 2026, 2027, or 2028, provided the other requirements are met.
This means families with a newborn or young child born during this window may want to review whether they qualify and whether it makes sense to open an account.
How Do Families Open a Trump Account?
Families can begin the process by submitting IRS Form 4547. The IRS currently directs taxpayers to sign in to their IRS account using ID.me and submit Form 4547 to get started.
The Social Security Administration has also announced that it is working to help parents enroll newborns in Trump Accounts through the existing process used when parents apply for Social Security numbers at birth.
Because this is a new program, families should be careful to use official government resources and avoid unofficial websites, emails, or messages that may attempt to collect personal information.
How Much Can Be Contributed?
In addition to the possible $1,000 federal contribution for eligible children, families may also be able to make annual contributions.
The official Trump Accounts website states that families can add up to $5,000 per year. State Street notes that the annual contribution limit is $5,000 per child and that parents, guardians, family members, friends, and others may contribute.
Employers may also have an opportunity to contribute. State Street notes that employers can contribute up to $2,500 per year for an employee’s dependent child, excluded from the employee’s taxable income.
For business owners, this is a provision worth watching. It may eventually become a creative benefit for attracting and retaining employees, especially for businesses that want to offer family-oriented financial benefits.
How Are Trump Accounts Invested?
Trump Accounts are not ordinary savings accounts. They are investment accounts.
During the child’s growth period, the funds are generally limited to certain low-cost mutual funds or exchange-traded funds that track qualified indexes weighted heavily toward U.S. companies. State Street notes that eligible investments must generally track a qualified index with at least 90 percent U.S. company weighting and have annual fees or expenses below 0.1 percent.
This structure is intended to encourage long-term investing, but families should understand that investing always involves risk. Account values can rise and fall based on market performance.
How Does This Fit With Other Savings Options?
Trump Accounts may be useful, but they should not automatically replace other planning tools.
For example, families may already be using 529 college savings plans, custodial accounts, Roth IRAs for working teenagers, or other investment accounts. Each option has different rules, tax treatment, access restrictions, and planning considerations.
The right approach depends on the family’s goals. Are you saving for education? A first home? Long-term retirement? General financial flexibility? The answer may affect which account type makes the most sense.
What Should Parents and Grandparents Do Now?
If you have a child or grandchild who may qualify, here are a few practical steps to consider:
- Confirm whether the child is eligible, especially if born between January 1, 2025 and December 31, 2028.
- Review the official IRS and Treasury guidance before submitting any personal information.
- Consider whether you want to contribute beyond the federal pilot amount.
- Compare the account with other savings tools, such as a 529 plan or custodial account.
- Speak with your tax professional or financial advisor before making larger contributions.
The Bottom Line
Trump Accounts are a new planning opportunity for families with children, especially those who qualify for the $1,000 federal contribution. They may also become relevant for employers looking to offer a new employee benefit tied to children and long-term savings.
Because the program is new, the details matter. Contribution rules, tax treatment, withdrawal restrictions, and investment options should all be reviewed carefully before deciding how this account fits into your overall plan.
If you have questions about how Trump Accounts may affect your family or business, Basso & Guida LLC can help you review the tax considerations and determine what steps may make sense for your situation.
