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Can My Child Get a Trump Account with $1,000 from the Government?
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Can My Child Get a Trump Account with $1,000 from the Government?

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A new federal savings program launches in 2026 giving eligible children $1,000 to start investing. Understanding who qualifies and how these accounts work helps you decide whether to open one for your child and how much to contribute.

Quick Answer

Trump Accounts are tax-advantaged savings accounts for children under 18, created under the One Big Beautiful Bill Act. Children born between January 1, 2025, and December 31, 2028, receive a one-time $1,000 federal deposit. 

Anyone can contribute up to $5,000 per year total (employers can contribute up to $2,500 of that amount). The money must be invested in broad U.S. stock index funds and grows tax-deferred. 

Withdrawals are not allowed until age 18, when the account converts to a traditional IRA (IRS Notice 2025-68, December 2025).

 

 

What Is a Trump Account?

A Trump Account is a federally backed savings and investment account for children under 18. Created under the One Big Beautiful Bill Act signed in July 2025, these accounts function similarly to traditional IRAs but with special rules for minors.

Key features:

  • Available to any U.S. child under 18 with a valid Social Security number

  • $1,000 federal deposit for children born 2025 through 2028

  • Up to $5,000 annual contribution limit

  • Must be invested in low-cost U.S. stock index funds

  • Tax-deferred growth

  • No withdrawals until age 18

  • Converts to traditional IRA at age 18

The program launches July 4, 2026. Parents can open accounts starting that date (IRS, Trump Accounts, 2025).

 

 

Who Qualifies for the $1,000 Federal Deposit?

Children Born 2025 Through 2028

Your child receives a one-time $1,000 deposit from the U.S. Treasury if they:

  • Were born between January 1, 2025, and December 31, 2028

  • Are U.S. citizens

  • Have a valid Social Security number

The $1,000 deposit does NOT count toward the $5,000 annual contribution limit (IRS Notice 2025-68, December 2025).

Children Born Before 2025 or After 2028

Children outside this birth window can still have Trump Accounts with all the same features (contribution limits, investment options, tax benefits), but they will NOT receive the $1,000 federal deposit.

Private funding option: Billionaires Michael and Susan Dell pledged $6.25 billion to provide $250 to 25 million children ages 10 and younger who don't qualify for the federal $1,000. 

To qualify for the Dell contribution, children must live in ZIP codes where the median household income is $150,000 or less. Details on how to claim the Dell contribution are still being finalized (White House Fact Sheet, December 2025).

 

 

How Much Can You Contribute?

Annual Contribution Limits

Total from all sources: $5,000 per year per child (adjusted for inflation starting 2028)

Employer contributions: Up to $2,500 per year from each parent's employer (counts toward the $5,000 total)

Family and friend contributions: The remainder up to $5,000 total

Government and charitable contributions: No limit (does not count toward the $5,000 annual cap)

Example: Your employer contributes $2,500. You and grandparents can contribute an additional $2,500 for a total of $5,000.

Who Can Contribute

  • Parents

  • Grandparents

  • Other family members

  • Friends

  • Employers (tax-free to employee up to $2,500)

  • Federal, state, and local governments

  • Charitable organizations

(IRS Notice 2025-68, December 2025)

 

 

How Trump Accounts Work

Investment Requirements

Funds must be invested in:

  • Mutual funds that track broad U.S. stock market indexes (like the S&P 500)

  • Exchange-traded funds (ETFs) that track broad U.S. stock market indexes

You cannot invest in:

  • Individual stocks

  • Sector-specific funds (tech only, energy only, etc.)

  • International funds

  • Bonds

  • Cash equivalents

The investment must be in low-cost index funds designed to track the overall U.S. stock market. This keeps fees low and provides diversification (IRS, Trump Accounts, 2025).

Tax Treatment

While the child is under 18:

  • Contributions are made with after-tax dollars (no upfront deduction)

  • Earnings grow tax-deferred (no annual taxes on gains)

  • No withdrawals allowed except for death or rollover

After the child turns 18:

  • Account converts to a traditional IRA

  • Withdrawals are taxed as ordinary income

  • 10% early withdrawal penalty applies before age 59½ (unless exception applies)

  • Standard IRA contribution rules apply

Exception to early withdrawal penalty:

  • First-time home purchase (up to $10,000)

  • Qualified higher education expenses

  • Other traditional IRA exceptions

(IRS Notice 2025-68, December 2025)

 

 

How Trump Accounts Compare to Other Savings Options

Trump Account vs. 529 Plan

529 Plan:

  • Designed specifically for education expenses

  • Tax-free withdrawals for qualified education expenses

  • Some states offer tax deductions for contributions

  • Can be used for K-12 tuition (up to $10,000 per year)

  • Must be used for education or face penalties and taxes

Trump Account:

  • Can be used for any purpose after age 18

  • Withdrawals taxed as ordinary income (not tax-free)

  • No state tax deductions

  • Must wait until age 18 to access funds

  • Converts to traditional IRA at 18

Bottom line: 529 plans are better for education savings. Trump Accounts are better for general long-term savings and retirement.

Trump Account vs. Custodial Account (UGMA/UTMA)

Custodial Account:

  • Money can be used for any purpose that benefits the child

  • No contribution limits

  • Earnings may be subject to kiddie tax annually

  • Child gains full control at age of majority (18 or 21, depending on state)

  • More investment flexibility

Trump Account:

  • Money locked until age 18

  • $5,000 annual contribution limit

  • Tax-deferred growth (no annual taxes)

  • Limited to index fund investments

  • Converts to IRA (child doesn't get full control, but can make withdrawals)

Bottom line: Custodial accounts offer more flexibility. Trump Accounts offer tax-deferred growth and encourage long-term saving.

Can You Have Both?

Yes. Trump Accounts don't affect contribution limits for:

  • 529 plans

  • Custodial accounts

  • Traditional or Roth IRAs (if child has earned income)

  • 401(k)s or other retirement accounts

You can use Trump Accounts alongside other savings vehicles (Charles Schwab, Trump Accounts, 2025).

 

 

Potential Account Growth

The White House Council of Economic Advisers estimates account values based on historical S&P 500 returns:

With $1,000 government seed only (no additional contributions):

  • Value at age 18: $3,400 to $9,800

  • Value at age 28: $6,800 to $37,900

With maximum annual contributions ($5,000/year through age 17):

  • Value at age 18: $119,300 to $355,300

  • Value at age 28: $238,600 to $1,373,500

With moderate contributions ($2,500/year through age 17):

  • Value at age 18: $61,200 to $182,100

  • Value at age 28: $122,400 to $705,000

These projections assume the account is invested in S&P 500 index funds and use low, medium, and high return scenarios based on historical rolling 18-year and 28-year periods from 1975 to present. 

Actual returns will vary (White House Council of Economic Advisers, August 2025).

 

 

How to Open a Trump Account

Step 1: Wait for the Launch Date

Trump Accounts become available starting July 4, 2026. You cannot open an account before this date.

Step 2: Complete IRS Form 4547

Use IRS Form 4547 to:

  • Establish the initial Trump Account for your child

  • Elect the $1,000 federal contribution (if eligible)

  • Designate a preferred custodian (brokerage firm)

  • Choose an investment fund

You can file Form 4547 with your 2025 tax return or separately starting in early 2026 (IRS Notice 2025-68, December 2025).

Step 3: Activate the Account

In May 2026, the Treasury Department or its agent will send information to activate the account. You'll complete an authentication process to finish opening the account.

Step 4: Make Contributions (Optional)

After July 4, 2026, you can contribute up to $5,000 per year. Contributions can be made by:

  • Transferring money directly to the account

  • Having employers make payroll contributions

  • Accepting gifts from family members

You can also choose to make no additional contributions and let the $1,000 government deposit grow on its own.

 

 

What to Do Now

  1. Determine if your child qualifies for the $1,000 federal deposit. Check if they were born between January 1, 2025, and December 31, 2028. If yes, they automatically qualify if they have a valid Social Security number.

  2. Decide if a Trump Account fits your savings goals. Compare it to 529 plans (better for education) and custodial accounts (more flexibility). Trump Accounts work best for general long-term savings and retirement.

  3. Wait for Form 4547 to be released. The IRS will publish this form in early 2026. You can file it with your 2025 tax return (due April 2026) or separately.

  4. Plan your contribution strategy. Decide how much you'll contribute annually (up to $5,000). Consider whether employers will participate. Remember, even small amounts can grow significantly over 18+ years.

  5. Monitor for updates. Visit IRS.gov/trumpaccounts or TrumpAccounts.gov (launching 2026) for the latest guidance. The IRS is still finalizing many details.

  6. Consider the Dell contribution if eligible. If your child is 10 or younger and you live in a ZIP code with median household income under $150,000, watch for details on claiming the $250 Dell contribution.

 

 

Common Mistakes to Avoid

  • Expecting immediate access to funds. Money is locked until age 18. Don't open a Trump Account if you'll need the money for expenses before your child turns 18.

  • Assuming you can pick any investments. You must invest in broad U.S. stock index funds only. You cannot choose individual stocks, sector funds, or international investments.

  • Treating it like a 529 plan. Trump Account withdrawals are taxed as ordinary income. They're NOT tax-free for education like 529 withdrawals. Use a 529 if education is your primary goal.

  • Not understanding the conversion to IRA at 18. At age 18, the Trump Account becomes a traditional IRA. Your child can withdraw money but will owe taxes and potentially a 10% penalty if under 59½ (unless an exception applies).

  • Exceeding contribution limits. The $5,000 annual limit includes contributions from all sources except government and charities. Track all contributions carefully to avoid excess contribution penalties.

  • Opening an account before July 4, 2026. The program hasn't launched yet. Ignore any offers to open Trump Accounts before July 4, 2026. They're likely scams.

 

 

Forms and Resources

IRS Form 4547: [TBD - Form not yet released] Election to Establish Trump Account. Use this to open a Trump Account and elect the $1,000 federal contribution if eligible. Will be available in early 2026 at IRS.gov/forms.

IRS Notice 2025-68: Initial guidance on Trump Accounts. Explains eligibility, contribution limits, investment rules, and tax treatment. Available at IRS.gov.

IRS.gov/trumpaccounts: Official IRS page about Trump Accounts with updates, FAQs, and guidance. Available now.

TrumpAccounts.gov: Official government portal for opening accounts online. Launches mid-2026.

IRS Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs). Will apply to Trump Accounts after age 18 conversion. Available at IRS.gov/publications.

IRS Topic No. 557: Tax on Early Distributions from Traditional and Roth IRAs. Explains penalty exceptions that will apply after Trump Account converts to IRA at age 18. Available at IRS.gov/taxtopics.

 

 

Bottom Line

Trump Accounts give children a federally backed head start on long-term savings. Children born 2025 through 2028 receive $1,000 from the government, and anyone can contribute up to $5,000 per year. 

The money grows tax-deferred in low-cost stock index funds until age 18, when it converts to a traditional IRA. Trump Accounts complement (but don't replace) 529 plans and custodial accounts. The program launches July 4, 2026, with accounts opened using IRS Form 4547.

 

 

Sources

IRS Notice 2025-68, Trump Accounts – Internal Revenue Service – Published December 3, 2025 – https://www.irs.gov/pub/irs-drop/n-25-68.pdf

IRS, Trump Accounts – Internal Revenue Service – Current as of December 2025 – https://www.irs.gov/trumpaccounts 

White House Council of Economic Advisers, Trump Accounts Give the Next Generation a Jump Start on Saving – Executive Office of the President – Published August 2025 – https://www.whitehouse.gov/wp-content/uploads/2025/08/Trump-Accounts-Give-the-Next-Generation-a-Jump-Start-on-Saving.pdf 

White House Fact Sheet, Trump Accounts – The White House – Published December 3, 2025 – https://www.whitehouse.gov/briefing-room/statements-releases/2025/12/03/fact-sheet-trump-accounts/ 

Charles Schwab, What to Know About Trump Accounts – Charles Schwab & Co., Inc. – Published 2025 – https://www.schwab.com/learn/story/trump-accounts 

IRS Topic No. 553, Tax on a Child's Investment and Other Unearned Income (Kiddie Tax) – Internal Revenue Service – Current as of October 2025 – https://www.irs.gov/taxtopics/tc553 

One Big Beautiful Bill Act, Public Law 119-21 – 119th Congress – Enacted July 4, 2025 – Congress.gov 

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