Withdrawals from these accounts cannot be made until the child turns 18. The funds are intended for qualified expenses such as higher education, purchasing a home, or starting a small business.
These accounts, often referred too as ”Trump Accounts,” were established following a $6.25 billion donation from michael and Susan Dell to establish a universal savings account for every American child born after 2022. While proponents praise the programme’s universality and minimal enrollment requirements, critics argue it’s a regressive benefit as it provides funds to all, regardless of financial need. The accounts add another layer of complexity to existing family savings options, each with unique rules regarding eligibility, withdrawals, contribution limits, and tax implications. Experts at the Tax Foundation suggest existing 529 accounts offer greater flexibility and tax advantages.
