Key takeaways

• Trump accounts are a type of individual retirement account (IRA) intended to help anyone under age 18 with a social security number save and invest for the future.
• Under the pilot program, eligible U.S. children born from January 1, 2025, through December 31, 2028, will receive a one-time $1,000 contribution from the federal government to their account.
• Parents, family members, employers, and others can contribute additional money to a child’s Trump account, but those contributions are limited to a total of $5,000 per year.

What is a Trump account for kids?

Trump accounts, also known as 530A accounts, are a new type of traditional individual retirement account (IRA) for children under age 18. These custodial-style, tax-advantaged accounts are owned by the child, while a parent or guardian is authorized to act on the child’s behalf until they turn 18. The child is both the legal owner and the beneficiary of the account.¹ The U.S. Treasury Department will set up and administer the initial accounts, which are expected to become available on July 5, 2026.²

Who qualifies for a Trump account?

Any child under age 18 with a Social Security number is eligible for a Trump account. Some children may also qualify for a one-time $1,000 government contribution under the new pilot program. To be eligible, a child must:³

• Be born between January 1, 2025, and December 31, 2028
• Be a U.S. citizen
• Have an eligible Trump account opened on their behalf (and have not already claimed the pilot benefit)

How to open a Trump account for kids or a baby

Parents and legal guardians can open Trump Accounts for eligible children by making the election on IRS Form 4547 when filing taxes or by completing the form electronically on the trumpaccounts.gov website.

Trump account contribution limits

Parents, other adults, and employers can contribute up to a combined total of $5,000 per year per child to a Trump account, for 2026 and 2027. The contribution limit does not include the initial government seed contribution, if eligible, or any philanthropic contributions. Contribution limits may change in the future, as they will be subject to cost-of-living adjustments for future tax years.⁴

Individual contributions can be made on an after-tax basis or as a pre-tax payroll deduction, if offered by the employer. Employer-funded contributions (if available) are capped at $2,500 per year per employee. If an employee has multiple children, the employer may split the contribution among children.⁵

For example, Jane has two children — a baby born in January 2026 and a five-year-old. Jane opens two individual Trump accounts for her children. The baby is eligible for the government seed contribution of $1,000. Jane’s employer contributes $1,250 to each child’s account, for a total of $2,500. Jane can then contribute $3,750 to each of her child’s accounts before hitting the contribution limit of $5,000.

What investments are available in a Trump account?

Funds will be invested in a diversified portfolio of low-cost index funds designed to maximize long-term growth while minimizing risk.⁶ The investments will not use borrowed money, and annual fees and expenses are capped at 0.1% of the balance of the investment or less.

Trump accounts vs. 529s vs. custodial accounts

A key question for many parents is how Trump accounts differ from other custodial or tax-advantaged savings accounts for children, and why you might choose to open one instead of (or in addition to) another type of account. The table below summarizes the key differences and similarities between Trump accounts, 529 plans, and Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts.

When can you take withdrawals from a Trump account?

Withdrawals from a Trump account are restricted until the child turns 18, except for:

• Qualified rollover contributions
• Qualified ABLE rollover contributions*
• Distributions of excess contributions
• Distributions upon death of the account beneficiary

The beneficiary can take withdrawals from January 1^st in the year that they turn 18, however distributions are generally subject to the same rules as traditional IRAs. Withdrawals before age 59½ are generally subject to income tax and a 10% penalty unless they meet certain exceptions.⁷

Trump account tax implications

How Trump account contributions are taxed upon withdrawal depends on how they were contributed in the first place:

• Government contribution: The initial $1,000 contribution for eligible children will be taxable when withdrawn.
• Individual contributions: After-tax contributions made by the child’s parents or another adult are not taxable when withdrawn.
• Employee deferrals: Pre-tax contributions made by the child’s parents through their employer’s payroll are taxable when withdrawn.
• Employer-funded contributions: If available, contributions from a parent’s employer are made on a pre-tax basis and are taxable when withdrawn.

All earnings are taxable when withdrawn. Here’s how Trump account taxes could look in practice:

Tax treatment of a Trump account withdrawal

Assuming the account owner waits until age 62 before withdrawing funds, the table below shows how different types of contributions would be taxed.

Amounts marked as taxable are generally taxed as ordinary income at the account owner’s tax rate at the time of withdrawal.

What happens once the child turns 18?

When the child turns 18, they have a few options. First, they may choose to leave the money in the Trump account which will become subject to general IRA rules.⁸ Alternatively, they could roll over some or all of the balance to another retirement account, such as a traditional IRA or another eligible retirement account. Finally, they could consider a Roth conversion to a Roth IRA or Roth 401(k). Consider all your options, including taxes, fees and expenses, before moving money between accounts. Assess all benefits of current accounts before moving money.

Read more: A comprehensive guide to Roth conversions

Potential growth by age 18

If a child receives a $1,000 government contribution at birth and $5,000 is added each year for 18 years, the account could potentially grow to about $160,000 by age 18, assuming a 6% annual return.

Potential growth by retirement

Trump accounts are designed as a long-term savings vehicle. If the child keeps the money invested after age 18 — either in the Trump account or after rolling it into another retirement account — the funds can continue to potentially grow for decades.

One possible strategy is to convert the account to a Roth IRA at age 18. Whether a Roth conversion is appropriate depends on individual circumstances and tax considerations.

• A parent contributes $5,000 for their newborn and is eligible to receive the $1,000 government contribution.
• The parent contributes $5,000 in after-tax contributions per year for the next 17 years ($85,000).
• By age 18, assuming 6% annual growth, compounding monthly, the account grows to roughly $160,000, including about $69,000 in investment growth.
• The parent’s after-tax contributions (totaling $91,000) can be converted to a Roth IRA tax-free; the $67,000 in growth and the government seed contribution would be taxed at the child’s marginal rate at the time of conversion.
• If the Roth account then grows at 6% annually until age 62, the balance could reach around $2.2 million, tax-free.

For illustrative purposes only. Actual results will vary. This hypothetical example assumes a consistent 6% annual return, does not reflect market volatility, and does not account for inflation. Investment returns are not guaranteed and may be higher or lower.