If you’re planning to file taxes this season and have children at home, you may have heard about the new Trump Accounts for Kids. A Trump Account is a new type of federally backed savings and investment account for children. It’s similar to an IRA account. The money in a Trump Account grows tax‑deferred over time. It can only be accessed once the child turns 18.
These accounts were created as part of the One Big Beautiful Bill Act and are designed to help families give their children a financial head start through long‑term, tax‑advantaged savings.
Who qualifies for a Trump account?
To be eligible for a Trump Account, your child must be under age 18 at the end of the year the account is opened. They must also have a valid Social Security number. You can only open one account per eligible child.
If your child is born between January 1, 2025, and December 31, 2028, they’re eligible to receive an automatic $1,000 initial deposit from the U.S. Treasury when you open a Trump Account in their name.
There’s no separate type of account specifically for newborns. Note that you’ll need to receive your newborn’s Social Security number before the account can be opened in their name.
How do Trump accounts work?
Trump Accounts operate similarly to traditional IRAs. Once opened:
- The U.S. Treasury creates and initially administers the account.
- The money will be invested in low-cost index mutual funds designed to maximize long-term growth while minimizing risk.
- The money in the Trump Account will be allowed to grow tax‑deferred.
- Custodial control remains with you (the parent or guardian) until your child turns 18.
Once your child turns 18, the account transitions into a standard traditional IRA, and full control transfers to them.
How much can I contribute to a Trump Account?
The annual contribution limit is up to $5,000 per child per year. This can be from:
- Individual contributions (from parents, guardians, or others)
- Employer contributions
- Other allowable contributions determined by program rules
Qualifying children born between January 1, 2025 and December 31, 2028 will receive an automatic $1,000 initial deposit from the U.S. Treasury. After that, families may choose to contribute regularly, contribute occasionally, or rely solely on the initial $1,000 to grow over time.
How to open a Trump account
You’ll have the option to open a Trump account when you file your 2025 federal income tax return. You’ll need to provide:
- The child’s Social Security number, and
- A qualifying birth date within the program window to receive the $1,000 initial deposit.
An online portal is coming soon, so you can also open a Trump Account at trumpaccounts.gov. The Treasury will provide instructions to activate your account on July 5, 2026. Once the account is active, you can make contributions anytime.
Trump account vs. 529 Savings Plan
It’s possible to have both a Trump account and a 529 college savings plan for your child. Both offer tax advantages, but they serve different purposes:
Trump Accounts
- Funds grow tax‑deferred can’t be withdrawn before the child turns 18.
- Starting January 1, the year your child turns 18, the Trump Account is treated like a traditional IRA.
- Earnings are taxable when the child begins to withdraw from the account.
- Earnings are taxed as regular income (not as capital gains).
- Withdrawals can be used for a range of qualified expenses.
- Annual contribution limit: $5,000.
529 Plans
- Designed specifically for education‑related expenses.
- Earnings and withdrawals are tax‑free when used for qualified education.
- No annual federal contribution limit (though states may set limits).
Once I open a Trump account, will I need to keep making contributions?
No, you’re not required to keep making contributions to a Trump Account. If your child qualifies for the initial $1,000 from the U.S. Treasury, you may decide to let that deposit grow on its own, or you can contribute up to $5,000 per year.
If your child doesn’t qualify for the $1,000 deposit, you’ll likely want to make a contribution in the amount you choose. There is no minimum contribution requirement – only a $5,000 maximum contribution limitper year.
What are the withdrawal rules for Trump accounts?
The rules for withdrawing from Trump accounts are pretty straightforward: No withdrawals are allowed before age 18. Once your child turns 18, the fund is transferred to their control, and they can withdraw money as needed, though withdrawals may be subject to certain restrictions.
Withdrawals for qualified expenses like higher education, starting a business, or buying a first home will be taxed at ordinary income rates.
How are Trump accounts taxed?
Contributions to Trump accounts are after-tax. As a reminder, after‑tax contributions are made with money that’s already had income taxes taken out. So, when you put funds into a Trump Account, it doesn’treduce your taxable income for the year.
Money in a Trump Account will grow tax-deferred, and withdrawals will be taxed as regular income (not capital gains) once your child begins taking money out, after age 18. Early withdrawals aren’t allowed, so there are no early‑withdrawal penalties to worry about.
