The Internal Revenue Service and Treasury Department are preparing to launch “Trump Accounts,” a new type of individual retirement account for children, with the first pilot program contributions of $1,000 slated to begin hitting accounts on July 4, 2026, according to IRS guidance issued in December.
The accounts, authorized by the Working Families Tax Cuts, are designed to give young Americans a jump start on saving and feature a unique initial contribution from the federal government for eligible children born between January 1, 2025, and December 31, 2028. However, navigating the specifics of these accounts – from eligibility requirements to investment options – requires careful attention to the evolving guidance from the IRS and the official website, trumpaccounts.gov.
To be eligible for a Trump Account, a child must be under the age of 18 at the end of the year in which the account is opened, be a U.S. Citizen, and possess a valid Social Security number. An “authorized individual,” generally a parent or legal guardian, must open the account on behalf of the child, and can only open one Trump Account per child, according to the IRS.
The $1,000 pilot program contribution is contingent on an authorized individual claiming the child as a dependent on their tax return. Parents can elect to open an account for their child by submitting IRS Form 4547 with their 2025 federal income tax return. An online portal for establishing accounts directly through trumpaccounts.gov is expected to become available this summer.
While a Social Security number is generally required for parents opening an account, the IRS instructions for Form 4547 specify that non-resident and resident aliens without an SSN may apply their IRS Individual Taxpayer Identification Number instead.
Once Form 4547 is submitted, the Treasury Department will initiate an “authentication process” to activate the account, with pilot program contributions expected to be deposited starting July 4, 2026. The Treasury will deposit the funds “as soon as practicable” after confirming the account has been opened with a designated financial agent.
Beyond the initial federal contribution, several avenues exist for additional contributions. Employers may contribute up to $2,500 per employee per year, tax-free to the employee, though this contribution counts toward a $5,000 annual limit for combined family and employer contributions. Several companies, including JPMorgan Chase and BlackRock, have indicated plans to match the federal government’s $1,000 contribution for their employees’ children.
Parents, grandparents, and other individuals can also contribute, but these contributions are not tax-deductible. States, qualified nonprofit organizations, and philanthropists may contribute to a “qualified class” of beneficiaries – for example, all children born in a specific year or residing in a particular state. Michael Dell has pledged $250 seed contributions to accounts for children from middle- and lower-income households.
Investments within Trump Accounts are restricted to low-cost, broadly diversified U.S. Stock index funds or exchange-traded funds with expense ratios of no more than 0.10% – meaning an annual fee of no more than $1 per $1,000 invested. The specific funds approved for use by the federal government have not yet been announced.
Initially, accounts will be established with Treasury’s designated financial agent, but parents will eventually be able to transfer the full balance to a brokerage firm of their choice through a trustee-to-trustee rollover.
Funds in a Trump Account generally cannot be withdrawn until the child reaches age 18. Withdrawals may be used for qualified expenses like college or a first home without penalty, but withdrawals before age 59-1/2 for other purposes will be subject to a 10% penalty in addition to ordinary income tax. The use of funds to start a business as an adult is not explicitly exempt from the penalty based on current guidance.
While the accounts are intended to foster savings, some question their impact on lower-income families. Madeline Brown, a senior policy associate at the Urban Institute, noted that families with limited emergency savings may be unlikely to prioritize contributions beyond the initial $1,000, given low participation rates in other tax-advantaged savings plans like 529s and Roth IRAs.
