What to Know About the Trump Accounts

Parents, guardians and other authorized individuals can open this account for their child. A $1,000 federal seed deposit is available for U.S. citizens born from 2025 through 2028, with no income limit for those opening an account. Children born outside of the current pilot timeline may still have an account opened in their name but do not receive the federal deposit.

Who qualifies for the federal seed money?

The $1,000 deposit applies to children:

• Born between January 1, 2025, and December 31, 2028.
• Who are U.S. citizens with a valid Social Security number.
• Who have parents, or a single parent or guardian, who have Social Security numbers.

How to set up the account

As of July 4, 2026, accounts have opened for contributions. There are two ways to set up an account.

• IRS Form 4547 establishes the account and triggers the $1,000 deposit, if eligible. If you did not elect to open the account when you filed your 2025 tax return, you may file this form now.
• Another way you can set up the account is by using an online portal. This option supports families who did not file through their tax return or who have older children.

Initial accounts are administered by the U.S. Treasury. After the initial Treasury account is established and during the growth period, funds can be rolled over to a Trump Account at a private financial institution; the IRS is finalizing procedures for these rollovers. Investments must remain in U.S. stock index mutual funds or ETFs with a 0.10 percent expense cap within the growth period.

What is the growth period?

The growth period runs from the time the account is opened through December 31 of the year before the child turns 18. During this window, contributions are permitted, investments are restricted to eligible U.S. index funds and withdrawals are prohibited. On January 1 of the year the child turns 18, the growth period ends and the account follows standard traditional IRA rules.

When will the federal seed money be funded?

The one-time $1,000 deposit is issued after the account is established. Families who filed with 2025 tax returns may have already received confirmation and funding notices, or they may receive them by the end of 2026. No separate application is required.

Is it still worth opening an account without the seed money?

The answer depends on your planning goals. For many families, the account serves best as a supplemental vehicle rather than a primary one.

Benefits of opening an account for older children

• The tax-deferred growth is similar to a traditional IRA.
• There is potential Roth conversion once the child hits age 18.
• Savings are diversified beyond a single 529 plan.

Potential downsides

• Investment options are limited to U.S. index funds.
• Funds are locked until January 1 of the year when the child turns 18.
• Earnings, along with the government deposit and any employer contributions, are taxed as ordinary income at withdrawal; only after-tax contributions made by individuals are returned tax-free.
• 529 plans often offer more favorable tax treatment for education.

Planning guidance: uses, guardrails and nuances

What the account can be used for

These accounts are designed for long-term investing, with retirement as the primary goal. No withdrawals are permitted before January 1 of the year the child turns 18, aside from limited exceptions such as certain rollovers, the return of excess contributions or distributions upon death.

On January 1 of the year the child turns 18, the special account rules end and the account is treated as a traditional IRA. The beneficiary can also convert the account to a Roth IRA at that point. From age 18 forward, withdrawals before age 59½ are taxed as ordinary income and incur a 10 percent penalty unless a standard IRA exception applies, including:

• Qualified higher education expenses
• A first-time home purchase up to $10,000
• Disability and substantially equal periodic payments, among other standard IRA exceptions

These exceptions waive the 10 percent penalty only; ordinary income tax still applies to the taxable portion. After age 59½, withdrawals are penalty-free.

Tax and timing considerations

There are multiple tax considerations to keep in mind:

• The “kiddie tax” can apply to a child’s unearned income, including Trump Account withdrawals or Roth conversion income while the child is still a dependent, and increase tax costs.
• Roth conversions are most effective when the beneficiary is financially independent and in a low tax bracket.
• Spreading conversions across multiple years reduces total tax liability for larger balances.
• Contributions from individuals are treated as gifts and count toward the annual gift tax exclusion, $19,000 per recipient in 2026.
• Parents or guardians should maintain records of who contributed and how much. Only after-tax contributions from individuals create basis that is returned tax-free at withdrawal.

Financial aid considerations

The current expectation is that these accounts will be excluded from FAFSA asset calculations, consistent with their classification as retirement accounts; final guidance is pending. Withdrawals or Roth conversions during financial aid years count as student income, so time these transactions outside of aid years.

Behavioral considerations

At age 18, the account belongs to the beneficiary with no withdrawal restrictions beyond standard IRA rules. Families building larger balances should pair the account with financial education to support long-term financial wellness.

How other savings accounts measure up

The table below summarizes how the accounts compare to education savings plans, including 529 plans, UGMA (Uniform Gifts to Minors Act) and UTMA (Uniform Transfers to Minors Act):

*Final FAFSA treatment pending IRS guidance. Current expectation based on IRA classification.

The bottom line

Trump Accounts are one tool within a broader planning strategy. The right approach depends on your tax situation, estate plan, education goals and the ages of the children you plan to support.