Trump Accounts are a new, tax-advantaged savings vehicle for eligible children, created under the Working Families Tax Cuts/One Big Beautiful Bill framework and described by both the IRS and the White House as a way to give kids a long-term financial head start. They are structured as a type of individual retirement account for minors, with the account generally established by a parent or legal guardian.
Notice 2025-68 provides a general overview of how Trump Accounts work and addresses certain initial questions about creating initial and rollover Trump Accounts, the $1,000 pilot program contribution, other contributions – including qualified general contributions and section 128 employer contributions – eligible investments, distributions, reporting, and coordination with the rules applicable to other types of IRAs.
Key eligibility rules
An account can be opened for a child who has not turned 18 before the end of the calendar year in which the election is made and who has a valid Social Security number. The federal $1,000 pilot contribution applies to children born between Jan. 1, 2025, and Dec. 31, 2028, who are U.S. citizens with valid Social Security numbers.
Contributions and limits
The IRS says contributions cannot be made before July 4, 2026, and annual contributions are capped at an aggregate limit of $5,000, with employer contributions allowed up to $2,500 of that amount under an employer program. The account can receive deposits from parents, relatives, friends, employers, and certain governmental entities and charities, subject to the annual limit.
Investment and tax treatment
Funds in Trump Accounts must be invested in certain mutual funds or ETFs that track the S&P 500 or another index of primarily American equities. The account generally cannot be accessed before January 1st of the calendar year the child turns 18, and after that it is generally treated as a traditional IRA. Contributions are not deductible, but growth is tax-deferred, and later withdrawals are generally taxed under traditional IRA rules.
Why it matters for families
For families, the main appeal is long-term compounding with a government seed contribution for eligible children. The White House describes the program as a tax-advantaged investment opportunity for children, while IRS guidance emphasizes the account’s IRA-like structure, contribution rules, and age-based restrictions.
General Purpose and Difference from 529 Plans
Trump Accounts are broader long-term child savings accounts with IRA-like tax treatment and are serve as a great long term retirement planning tool. 529 plans are designed specifically for education savings and offer tax-free growth and tax-free withdrawals when used for qualified education expenses.
Opening the Account
Fill out IRS Form 4547 to make the election to set up the account. Then, an activation email will be sent to officially set up the account.
Sources: IRS Guidance and Trump Accounts