Trump Accounts – Individual Retirement Accounts for Minors

Overview of Trump Accounts

Trump Accounts are a new type of tax‑advantaged individual retirement account for minors that allow families to start long‑term investing for children under age 18. These accounts were created under the “One Big Beautiful Bill” legislation and are available to any child under 18 who has a valid Social Security number. An authorized individual – such as a parent, legal guardian, adult sibling, or grandparent – can open a Trump Account by filing Form 4547, the election form recently released in draft form by the IRS.

Trump Account Contribution Rules for Minors

Parents, relatives, and other eligible contributors can fund a child’s Trump Account with up to $5,000 per year until the child turns 18, with this limit scheduled for cost‑of‑living adjustments after 2027. Employers may also contribute up to $2,500 per year to a Trump Account for an employee or the employee’s dependent, and any employer contribution counts toward the same annual contribution limit. For children born after December 31, 2024 and before January 1, 2029, who are U.S. citizens with valid Social Security numbers, the law establishes a one‑time $1,000 federal pilot program contribution that can be deposited into an eligible Trump Account and does not reduce the annual $5,000 contribution cap.

Investments, growth, and distributions

How Trump Accounts Are Invested and Grow

Trump Account contributions must be invested in “eligible investments,” which generally include mutual funds and exchange‑traded funds that track an index of primarily U.S. companies or the overall U.S. stock market. Earnings inside the account grow tax‑deferred during a designated “growth period,” which begins on the date the Trump Account is established and ends on December 31 of the year before the calendar year in which the child turns 18. Distributions during this growth period are tightly restricted, and after the growth period ends, standard traditional IRA distribution rules apply, including potential additional tax on early withdrawals before age 59½ unless an exception is met.

After age 18: IRA treatment

What Happens to a Trump Account at Age 18

Once the growth period ends and the child reaches adulthood, the Trump Account effectively functions like a traditional IRA. The account holder may continue to contribute subject to traditional IRA contribution limits and earned income requirements, and future withdrawals are governed by the usual IRA rules. Early distributions may trigger additional taxes and penalties, while distributions taken in retirement are treated similarly to withdrawals from a traditional individual retirement account.

Future IRS Guidance on Trump Accounts

Because Trump Accounts are new and many technical details remain unsettled, the IRS is expected to release additional regulations and guidance in the coming months and years. Taxpayers, financial advisors, and tax practitioners should monitor IRS updates, formal guidance interpreting Form 4547, and future legislative changes to ensure Trump Account strategies remain compliant and optimized for each child’s long‑term retirement savings goals.

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FAQ

What is a Trump Account for kids?

A Trump Account is a tax‑advantaged investment account for a child under age 18 that works much like an individual retirement account, allowing after‑tax contributions to grow tax‑deferred in index‑based investments. The account is opened on the child’s behalf and is intended to give minors a long‑term head start on saving for education, a first home, or retirement.

Who is eligible for a Trump Account?

Any 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 is generally eligible for a Trump Account. There are additional citizenship and birth‑year requirements to qualify for the one‑time $1,000 federal pilot contribution

What is the $1,000 Trump Account bonus for children?

Children who are U.S. citizens and are born between January 1, 2025 and December 31, 2028 may qualify for a one‑time $1,000 federal “pilot program” contribution into a Trump Account. This seed money does not reduce the $5,000 annual contribution limit and is meant to jump‑start long‑term savings for qualifying children

How do I open a Trump Account for my child?

Parents, guardians, or other authorized adults use IRS Form 4547 to elect the creation of a Trump Account for an eligible child and, where applicable, request the $1,000 federal contribution. After the form is processed, the Treasury or its agent provides instructions to authenticate and finalize the account with a participating financial institution

When can families start contributing to Trump Accounts?

Trump Accounts are expected to be available beginning in 2026, with families able to open accounts in early 2026 and start making financial contributions on or after July 4, 2026. Once established, contributions can be made each year until the year before the child turns 18, subject to the annual $5,000 limit.

How are Trump Accounts invested and how does the money grow?

Funds in Trump Accounts must be invested in eligible mutual funds or exchange‑traded funds that primarily track U.S. stock market indexes, with the goal of long‑term, low‑cost growth. Investment earnings grow tax‑deferred during a defined “growth period” that runs from account opening until December 31 of the year before the child turns 18.

Can you withdraw money from a Trump Account early?

Withdrawals are highly restricted during the growth period while the child is under 18, and the account is designed to keep funds invested for the long term. After the growth period ends, the account follows traditional IRA‑style rules, and early distributions before age 59½ can trigger additional taxes and penalties unless an exception applies.