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Takeaways
A provision of the One Big Beautiful Bill Act created "Trump Accounts," a new type of individual retirement account (IRA) for children. Starting in 2026, a Trump Account may be opened for any child who is a U.S. citizen, has a Social Security number, and who will still be under age 18 by the end of the calendar year.
Related Links
IRS and Treasury Guidance
- Final regulations are not yet available, but Notice 2025-68 summarizes how Trump Accounts will work.
- The IRS website directs taxpayers to a new website, trumpaccounts.gov (not yet active), for further information about the accounts.
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Creating a Trump Account
To create a Trump Account, an authorized person, such as a parent or guardian, must make an election by filing a Form 4547 Trump Account Election, which may be filed with the authorized person's 1040. Once the election is filed, the Treasury Department will create a Trump Account for the child. The form 4547 is not yet finalized or available on the Internal Revenue Service website, but is expected to be available for filing with tax returns due in 2026. Money can be contributed to Trump Accounts starting on July 4, 2026.
Special "Growth Period" Opportunities and Restrictions
The growth period for the account is from January 1 of the year the child is born, or from the year the account is created, until December 31 of the year before the child turns 18. Special restrictions apply during the growth period:
- Funds in a Trump Account can be invested only in eligible investments. Generally, an "eligible investment" is a mutual fund or exchange-traded fund that tracks an index of primarily U.S. companies, does not leverage, and has annual fees and expenses of less than 0.1% of the fund balance.
- Trump Accounts have an aggregate annual contribution limit of $5,000 (indexed after 2027) per account/child. This limit is separate from the limits for any other retirement account.
- Trump Accounts are not allowed to make distributions during the growth period.
- Individuals may not take tax deductions for Trump Account contributions.
- The trustees of Trump Accounts have similar but not identical reporting requirements to the trustees of other IRAs.
After the growth period ends, these special restrictions no longer apply, and generally, the rules under Internal Revenue Code Section 408 governing traditional IRAs apply instead.
Making Contributions to a Trump Account
During the growth period, five types of contributions can be made to a Trump Account:
- Under a pilot program, the federal government will deposit $1,000 into the Trump Accounts of children born between January 1, 2025, and December 31, 2028. (This $1,000 will not count towards the account's annual contribution limit.)
- Individuals, such as the beneficiary, parents, or other people, may contribute with after-tax dollars up to the annual limit per account/child. A parent or guardian may also make pre-tax contributions through a Section 125 plan to their dependent's account(s), if their employer offers it.
- Employers may contribute up to $2,500 annually (indexed after 2027) to an employee's or the employee's dependent's Trump Account, if they formally establish an employer-sponsored plan. These contributions count toward the yearly limit but are not considered taxable income for the employee. The notice clarifies that if an employee has multiple children with Trump Accounts, the employer's total contribution remains capped at $2,500.
- Governmental entities and charities may make Qualified General Contributions to a qualified class of beneficiaries' accounts. Classes are either those born in specified years, who live in specified states, or all beneficiaries in the growth period.
- Qualified rollover contributions are allowed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
