As part of the “One Big, Beautiful Bill Act” (OBBBA), Congress introduced a new savings vehicle for children called “Trump Accounts” (or 530A accounts), which are designed to help families invest into their children’s financial futures. Enrollment is now live and can be done through the IRS form 4547, but the program officially launches on July 4th, 2026.
Note: Regulatory requirements and guidance may change before contributions to Trump Accounts are permitted this July.
A Trump Account is a type of Individual Retirement Account (IRA) that can be established for eligible U.S. children under age 18. While traditional and Roth IRAs can both currently be opened for minors, they still require that the minor child has earned income in order to make contributions. A Trump Account essentially acts as a Guadian IRA, where a parent or legal guardian is the custodian for the minor child, but it eliminates the earned income requirement for contributions. This is the primary distinction from other retirement account types. Trump Accounts have special rules before the minor child turns 18; after which, the account becomes nearly identical to a standard Traditional IRA.
Contributions into Trump accounts currently have a $5,000/year limit, including contributions made by employers (employer contributions additionally have a $2,500/year limit). Contributions can be made from anyone – parents, relatives, friends, etc. Unlike other retirement accounts, which often allow contributions to be made up until the tax filing deadline of the next year, contributions must be made during the calendar year and are generally NOT tax deductible for the contributing party. Note that the $5,000 limit does NOT include the $1,000 seed deposit provided by the treasury, nor does it include contributions made by corporations.
The Treasury plans to deposit $1,000 into all Trump Accounts created for a child born between 2025-2028 (only one account can be created for each child). This seed deposit must be elected for when filling out form 4547. It also appears that corporations and non-profits are allowed to make general contributions to Trump accounts, which would be distributed to Trump accounts proportionately. These are “General Qualified Contributions,” which are NOT included in the $5,000/year limit. Corporations can also specify a geographic area and/or an age bracket (so, for example, Microsoft could decide to make a $25 contribution to all Trump accounts for children under age 5 who live in Washington State). Note that this is not to be confused with employer contributions, which can be offered by an employer for the benefit of the employee’s child and is subject to the $2,500 employer limit and $5,000 total contribution limit.
We have a bit more information about how this will work mechanically now, following the creation of the Trump Account app (which is already available to download). It currently looks like this is the only place to open and invest in a Trump account. This move makes sense considering there are significant limitations on how the account can be invested.
Trump Accounts can only be invested in a “mutual fund or ETF that tracks an index of primarily US companies, such as the S&P 500.” It remains to be seen what other indexes will be offered through the Trump Account app, but the selections are likely to be particularly limited considering that it must be a broad index. It cannot have any kind of factor or filter applied, such as being specific to a particular sector, industry, growth style, value style, minimum volatility factor, quality factor, etc. Importantly, it also must be an equity index and cannot be left in cash or in a money market fund. While the risk level of an all-equity portfolio is appropriate given the age of the minor child, it also opens the door for volatility if any of the funds are being planned to use for college related expenses.
For any children born between 2025-2028, we would absolutely recommend opening a Trump account to receive the $1,000 seed deposit from the Treasury. Having an open account also opens the possibility for general corporate contributions, although any amounts there are uncertain. The more difficult question is if making your own contributions makes sense for your family –
There are a few key considerations that need to be understood before contributing into a Trump Account for your child. Firstly, bar a few limited exceptions, no distributions are allowed from the account prior to age 18. This is different than any other retirement account type and any other account type for minors, whereby distributions are generally allowed at any time, but are penalized if not qualified (i.e., after reaching age 59.5 for an IRA/401k, used for qualified education expenses for a 529 Plan, etc.). Trump Accounts also do not allow for hardship related distributions, so the funds will almost undoubtably be inaccessible before age 18.
Because the minor child is also likely to be considered the owner of the funds, it could have a significant impact on college financial aid eligibility when filing the FAFSA. With current regulations, 529 Plans likely remain more favorable (over a Trump Account) if the goal is specifically to save for a child’s college expenses (529 Plan assets still affect the FAFSA, but to a lesser degree).
Another important consideration here is that standard contributions are NOT tax deductible, which introduces a form of “basis” in the accounts. When funds are eventually distributed (for a qualified distribution), any growth beyond the original contribution amounts (the basis) would be taxable. Essentially, it acts as making a non-deductible contribution to an IRA, which is not generally recommended for outside of specific circumstances (such as a back-door Roth conversion). There is quite a bit of nuance here, so we strongly recommend speaking to a financial professional prior to contributing to your child’s accounts. There may be more appropriate investment vehicles depending on your goals.
For more information, we recommend looking at the dedicated .gov website for Trump Accounts (trumpaccounts.gov).
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