Trump Account Glossary
Every Trump Account term explained in plain English.
Last verified: 2026-02-12Trump Account
A tax-advantaged savings account for children under IRC §530A, created by the One Big Beautiful Bill Act. Provides a $1,000 federal deposit for 2025–2028 births and converts to a traditional IRA at age 18.
IRC Section 530A
The section of the Internal Revenue Code that establishes Trump Accounts. Created by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025.
IRS Notice 2025-68
The first official IRS guidance on Trump Accounts, published December 3, 2025. Covers eligibility, contributions, investments, and the pilot program.
IRS Form 4547
The IRS form used to elect (open) a Trump Account for a child. Filed with your federal tax return or through the trumpaccounts.gov portal.
One Big Beautiful Bill Act (OBBBA)
The federal legislation signed on July 4, 2025 that created Trump Accounts under IRC §530A. Also known as OBBBA.
Pilot Program
The federal program that deposits $1,000 into Trump Accounts for U.S. citizen children born between January 1, 2025 and December 31, 2028.
Growth Phase
The period from account opening until the child turns 18. During this phase, funds are invested and grow tax-deferred. Withdrawals are generally not permitted.
Traditional IRA Conversion
At age 18, a Trump Account automatically converts to a traditional IRA. The child becomes the account owner with standard IRA rules for contributions, withdrawals, and taxes.
Section 128 (IRC §128)
The tax code section allowing employers to contribute up to $2,500/year per employee to Trump Accounts, excluded from the employee's gross income (tax-free).
Eligible Child
A U.S. citizen under age 18 with a valid Social Security number. There are no income restrictions.
Annual Contribution Limit
The maximum amount that can be contributed to a Trump Account per year: $5,000 (indexed for inflation starting 2027). Includes all contributions from all sources.
Expense Ratio
The annual fee charged by a fund as a percentage of assets. Trump Account-eligible funds must have expense ratios capped at 0.1% (10 basis points).
S&P 500 Index Fund
A mutual fund or ETF that tracks the Standard & Poor's 500 index — the 500 largest U.S. public companies. One of the eligible investment types for Trump Accounts.
Tax-Deferred Growth
Investment earnings (dividends, capital gains) that are not taxed while they remain in the account. Taxes are owed only upon withdrawal. Trump Accounts offer tax-deferred growth during the growth phase.
Kiddie Tax
IRS rules that tax a child's unearned income above $2,600 at the parent's tax rate. Applies to UTMA/UGMA custodial accounts but NOT to Trump Accounts (which are tax-deferred).
Early Withdrawal Penalty
A 10% penalty on traditional IRA withdrawals before age 59½. Applies to Trump Account withdrawals after the account converts to an IRA at 18. Some exceptions exist (first home, education, disability).
Roth Conversion
Converting a traditional IRA to a Roth IRA. At age 18, a Trump Account owner can convert their traditional IRA to a Roth, paying income tax now for tax-free growth and withdrawals later.
Dell Foundation Pledge
Michael and Susan Dell's $6.25 billion pledge to provide $250 per child under 10 in ZIP codes with median household income below $150,000. Separate from and in addition to the $1,000 federal deposit.
trumpaccounts.gov
The official U.S. government portal for Trump Accounts, expected to launch mid-2026. Will allow parents to submit Form 4547 online and manage their elections.
IRS Notice 2025-68 Explained
Full IRS guidance translated to plain English
Frequently Asked Questions
Answers to the most common Trump Account questions
Educational content only, not tax or financial advice. Source: IRS Notice 2025-68.