Trump Accounts are a new federal savings and investment vehicle for children created under the Working Families Tax Cuts portion of the “One Big Beautiful Bill Act.” They are designed to help families start building wealth for their children early in life through tax-advantaged investing and contributions from families, employers, charities and the government. These accounts aim to give the next generation a head start on building wealth, combining federal seed money, family and community contributions and long-term investment growth. These accounts represent a new government effort to incentivize early financial saving and investing potentially helping young adults pay for education, a first home, retirement or other financial goals later in life.

What are Trump Accounts?

Trump Accounts are tax-deferred savings accounts for children under age 18, similar in some ways to traditional individual retirement accounts (IRAs). Funds deposited in these accounts grow over time through investment earnings. Once the child reaches 18 years old, the account generally functions like a traditional IRA, subject to IRA rules on contributions and withdrawals.
 

Who is eligible?

Any US child under age 18 with a valid Social Security number may have an account opened on their behalf by a parent or guardian.

• Every US citizen born between January 1, 2025 and December 31, 2028 is eligible for a one-time $1,000 government seed contribution if the account is established before the year they turn 18. This contribution does not count toward the annual $5,000 contribution limit.
   

Annual contribution limits and who can contribute

• $5,000 per year total per child (indexed for inflation after 2027).
• Anyone can contribute: parents, guardians, family, friends and even the child when older.
• Employers can contribute up to $2,500 per year for an employee’s dependent child, excluded from the employee’s taxable income.
• Charities and government entities may also contribute to groups of eligible children, sometimes without counting toward the $5,000 annual limit.
• Contributions to Trump Accounts are expected to begin July 4, 2026. No deposits can be made before that date.
   

How are these accounts invested?

• The accounts during the “growth period” (period prior to the beneficiary turning 18) are limited to investing in mutual funds/ETFs that track to a qualified index with at least 90 percent US company weighting (e.g., S&P 500), do not use leverage and have annual fees/expenses below 0.1 percent. Cash and money market funds are not permitted.
• The intention of this rule is to encourage long-term market exposure and compound growth rather than short-term trading.
• This long-term investing structure, paired with consistent funding and compound returns, gives these accounts significant growth potential over many years.
• Trump Accounts will initially be created and held with Treasury’s designated financial agent. Eventually, parents or guardians should be able to transfer the full balance to a preferred brokerage firm through a trustee-to-trustee rollover.
  
  

How do I open one of these accounts for my child/children?

Parents or guardians use IRS Form 4547 to make the election and establish the account. Once the election is filed (including with a tax return), the US Treasury or its agent will send instructions to activate the account starting in mid-2026. Learn more and sign up at: trumpaccounts.gov.
 

How does the money get distributed once the child reaches 18?

Money generally cannot be withdrawn until the child turns 18. At age 18, the account functions like a traditional IRA. Withdrawals of earnings are taxed as ordinary income and may face a 10 percent penalty if taken before age 59½, unless an exception applies (e.g., qualified higher education expenses, first-time home purchase or disability).