Summary
- Starting in July 2026, Trump Accounts are new IRA accounts for children
- There is a $1,000 pilot program, subject to taxation regulations
- There are various ways a Trump Account may fit into your gifting strategies
In 2025, the One Big Beautiful Bill Act debuted Trump Accounts, a new type of IRA that lets families save and invest for children. We wrote a blog about these new accounts in February, in advance of their kick off on July 4th, 2026. Now that these accounts are in action, we thought we’d revisit the topic.
Read the original blog for the basics, and read on here for more about these new accounts.
Rollout
Trump Accounts officially went live on July 4th, 2026 with the launching of the Trump Account app. Individuals interested in opening a Trump account do so via IRS Form 4547, which can be completed directly on the Trump Account app, while filing your taxes, or through a secure IRS website. Contributions and investment selections are also managed through the app.
To be eligible to open an account, the child who the account is for just needs to meet two requirements:
- To be under age 18 the entire calendar year in which the account is opened,
- And have a Social Security number
Since July 4th, 2026 more than 6.5 million children have had accounts opened on their behalf. That might sound like a lot, but there are 72 million children eligible.
Right before rollout there were also two updates to the policy: one allowing parents to enroll newborn babies directly through hospital birth-registration, and the other allowing state child welfare agencies to open accounts for foster children.
The $1,000 Pilot Program
In our original blog, we explained Trump Accounts in detail, but also talked about how Trump Accounts are only one way to give, save, and invest, to children. There are a lot of vehicles available, including UTMA accounts, 529 plans, trusts, and more that can be used in coordination with each other and Trump Accounts. The right combination for your gifting strategy is dependent on your family’s particular financial situation and goals, but there is one prominent consideration that may motivate you to open a Trump Account: The $1,000 Pilot Program.
The pilot program means that eligible children can receive a free $1,000 contribution to their Trump Account from the federal government. The eligibility requirements include:
- The child must be born between January 1, 2025 and December 31, 2028,
- They must be a U.S. citizen,
- They must be a tax-dependent of the person filing the election,
- And they need to have received their Social Security number before the election is filed
So to obtain the free $1,000, you would:
- Make sure you child meets eligibility criteria, and make sure you have their Social Security number before applying
- Open the Trump Account via the Trump Account app, or the IRS portal, via Form 4547. This forms includes a location to check a box to elect the $1,000 pilot contribution. There is no separate form required.
- Wait for confirmation, approval, and the deposited funds.
Opening a Trump Account is the only way to obtain this free $1,000. Opening a Trump Account and receiving this free $1,000 does not obligate you ever contribute to the account again. Depending on your financial situation and goals, it might make sense to contribute ongoing to a Trump Account, but there are also scenarios in which it makes sense to receive the $1,000, set it and forget it while funding other means of giving.
Taxation
A free $1,000 is great! But there is a taxation distinction from other contributions to the Trump Account, if you (or others) choose to continue funding it with additional contributions over the years.
- After-tax contributions from family and friends are not taxed when withdrawn.
- Any employer contributions and contributions from charities or government entities (including the $1,000 pilot program!) are taxable when withdrawn.
These tax rules only apply to the principal contribution amounts, the earnings grow tax-deferred and are taxable at the time of withdrawal regardless of where the contribution came from.
And all funds in the account are subject to a 10% early withdrawal penalty if taken before age 59 ½ (but there are exceptions).
Takeaways
Trump Accounts don’t fit into everybody’s financial plan, but for those eligible for a $1,000 contribution, there’s no downside to opening an account to obtain that contribution.
For advice specific to your own giving strategy, reach out to us!
Trump Accounts offer tax deferred growth on earnings. Family contributions are made with after tax dollars, and eligible employer contributions may be excluded from the employee’s taxable income. A one time $1,000 federal contribution may be available for eligible children born between 2025 and 2028. Distributions are generally prohibited during the child's growth period and, once permitted, are taxable as ordinary income and may be subject to a 10% IRS early distribution penalty if taken before age 59½. Contribution limits and other restrictions apply, and some rules remain subject to future Treasury and IRS guidance. Consult a qualified tax advisor or financial professional before making decisions.