What Are Trump Accounts? A Complete Guide for Parents

Trump Accounts are a new type of tax-advantaged savings account created by the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. Officially established under IRC Section 530A, they're designed to give every American child a financial head start.

✅ The short version

The government deposits $1,000 for every child born 2025–2028. Parents can add up to $5,000/year. It grows tax-deferred in S&P 500 funds until age 18, then converts to a traditional IRA.

How Trump Accounts Work

Federal Seed Money: Children born January 1, 2025 through December 31, 2028 receive a one-time $1,000 pilot deposit from the federal government.
Annual Contributions: Parents (or anyone) can contribute up to $5,000/year in after-tax dollars. This limit is indexed for inflation starting in 2027.
Employer Contributions: Employers can contribute up to $2,500/year per employee, tax-free under IRC §128. This counts toward the $5,000 cap.
Investment: All funds must be invested in mutual funds or ETFs tracking the S&P 500 or a broad U.S. equity index. Expense ratios are capped at 0.1%.
Growth Phase: From birth to age 18, the account grows tax-deferred. No withdrawals are allowed.
At Age 18: The Trump Account automatically converts to a traditional IRA with standard IRA rules.

Who Is Eligible?

To open a Trump Account, the child must be:

A U.S. citizen
Have a valid Social Security Number (SSN)
Under 18 at the end of the election year

There are no income restrictions — any family can participate regardless of how much they earn.

ℹ️ $1,000 pilot deposit eligibility

Only children born between January 1, 2025 and December 31, 2028 qualify for the $1,000 federal pilot deposit. Children born outside this window can still open a Trump Account but won't receive the deposit.

How to Open a Trump Account

There are three ways to establish a Trump Account:

With your tax return: Include IRS Form 4547 (Trump Account Election(s)) with your 2025 tax return, due April 15, 2026.
Online portal: Through trumpaccounts.gov (expected to launch mid-2026).
By mail: Send Form 4547 to the IRS.

The Dell Foundation Pledge

Michael and Susan Dell pledged $6.25 billion — $250 per child under 10 in ZIP codes where the median income is below $150,000. This is in addition to the $1,000 federal pilot deposit.

Tax Treatment

Trump Accounts use traditional (tax-deferred) treatment:

Contributions are made with after-tax dollars (no tax deduction)
Earnings grow tax-deferred during the growth phase
Withdrawals after age 18 are taxed as ordinary income
Before age 59½, a 10% early withdrawal penalty applies (standard IRA rules)

📜 From IRS Notice 2025-68

"A Trump Account is a trust created or organized in the United States for the exclusive benefit of an eligible beneficiary..."

Plain English: It's a savings account your kid owns. You manage it until they turn 18, then it becomes their traditional IRA.

Frequently Asked Questions

Run the Numbers

Use our free calculators to see how a Trump Account could work for your family: