The Department of the Treasury and the IRS have issued guidance on “Trump Accounts,” a new type of individual retirement account (IRA) for children under 18. The accounts allow families, employers, and certain organizations to contribute to long-term savings for eligible children.
Eligible newborns born between Jan. 1, 2025, and Dec. 31, 2028, receive a one-time $1,000 federal deposit as part of a pilot program. Following a private $6.25 billion donation, children under 10 who meet income and ZIP-code criteria may receive a $250 initial contribution. Children outside these categories can still have an account opened, but without a federal seed contribution.
Parents and guardians can establish a Trump Account using IRS Form 4547, currently in draft form. Contributions cannot be made before July 4, 2026. Annual contributions from parents or guardians are limited to $5,000 per child, with employer contributions capped at $2,500 per year, which do not count toward taxable income. Contribution limits will adjust for inflation starting after 2027.
Funds must be invested in specified mutual funds or ETFs tracking the S&P 500 or similar indices. Withdrawals are generally restricted until the calendar year in which the child turns 18, after which accounts follow rules similar to traditional IRAs.
More details about Trump Accounts are available on the White House’s website, trumpaccounts.gov.
