Trump Accounts

The Treasury Dept. is working hard at promoting Trump Accounts. They’re a new type of tax-advantaged savings account for young children under age 18 who have a Social Security number. Congress enacted Trump Accounts in last summer’s OBBB. They will officially launch next month, on July 4, 2026.

Parents elect to open a Trump Account for their child by filing Form 4547. Filers can submit the 4547 through their IRS individual online accounts or can e-file or mail it. Parents who sign their child up for a Trump Account will receive an e-mail from Treasury confirming the election and containing instructions on how to set up and activate the account through the Trump Accounts app, found on app stores.

The government will put $1,000 in each Trump Account set up for children born after 2024 and before 2029. This is a one-time pay in, and parents must opt in, using the same method for opening the accounts. Look for this deposit after July 4. Up to $5,000 of additional money can be put in a Trump Account each year, starting on July 4, by parents or any other person until the child reaches 18. Of this amount, up to $2,500 can be funded tax-free by an employer of the parent or beneficiary. Parents, relatives, etc. can’t deduct contributions to Trump Accounts. It’s currently unclear whether the parent or relative must file a gift tax return on Form 709 when they contribute money to a Trump Account. The AICPA and other tax professional organizations have asked for IRS guidance on this issue.

Trump Account funds can be invested only in certain stock mutual funds or exchange-traded funds, such as one that follows Standard & Poor’s 500-stock index. Distributions generally can’t be taken while the beneficiary is under 18. Starting in the year the beneficiary turns 18, any distributions are taxed in a manner similar to rules that apply to withdrawals from traditional IRAs. A Trump Account may be rolled over to a traditional IRA for the same beneficiary or certain other retirement accounts, in or after the year the beneficiary turns 18.