Introducing Trump Accounts: A New Opportunity for Families

The IRS and the Department of the Treasury have announced plans to introduce Trump Accounts, a new type of individual retirement account (IRA) created under Section 70204 of the One, Big, Beautiful Bill Act (OBBBA). These accounts are designed to help families invest for their children’s future and will be available starting July 4, 2026, for taxable years beginning after December 31, 2025.

What Are Trump Accounts?

Trump Accounts are traditional IRAs established exclusively for individuals under age 18. They come with unique rules during the “growth period” (until the beneficiary turns 18):

• Investments: Funds can only be invested in eligible mutual funds or ETFs that track U.S. company indexes like the S&P 500, without leverage, and with annual fees below 0.1%.
• Contributions: Contributions are allowed even if the child has no income. Certain contributions are exempt from annual limits, while others are capped at $5,000 per year (adjusted for inflation after 2027).
• Distributions: Withdrawals are generally prohibited during the growth period, except for rollovers or in the event of the beneficiary’s death.
• Reporting: Trustees must report contributions, distributions, and account details to both the IRS and the account beneficiary.

After the growth period, Trump Accounts will follow traditional IRA rules, with some exceptions.

Eligibility and How to Open an Account

• Eligible Individuals: Must be under age 18, have a Social Security number, and have an election made on their behalf.
• Opening an Account: Parents or legal guardians can open an account using IRS Form 4547 or through the online portal trumpaccounts.gov (available mid-2026). Form 4547 can be filed with your 2025 personal income tax return, but funding begins in July 2026.

Pilot Program Contributions

Children born between January 1, 2025, and December 31, 2028, who have a valid Social Security number, will receive a $1,000 contribution from the Treasury Department into their Trump Account starting July 4, 2026.

Employer Contributions

Employers can contribute up to $2,500 annually (adjusted for inflation after 2027) to Trump Accounts for employees or their dependents. Contributions for dependents may be offered via salary reduction under a Section 125 cafeteria plan.

What Should Families Do Now?

While accounts cannot be funded until mid-2026, families can prepare by:

• Ensuring eligible children have Social Security numbers.
• Planning to file Form 4547 with their 2025 tax return.
• Consulting with a CPA to understand contribution strategies and compliance requirements.

For more details, visit trumpaccounts.gov