One year after passage of the One Big Beautiful Bill Act (OBBA), Trump Accounts were officially launched alongside the nation’s July 4 celebration. Trump Accounts are new tax-advantaged savings accounts for children who have a valid Social Security number and are under age 18.
As part of a limited pilot project, the government will contribute $1,000 to a Trump Account for each eligible child born between January 1, 2025, and December 31, 2028.
Who can open a Trump Account?
Parents, legal guardians, grandparents, and adult siblings can establish a Trump Account for an eligible child. Each eligible child is limited to one Trump Account. To open an account, an authorized individual must submit IRS Form 4547 through the IRS online ID.me portal. Once the account is established, contributions can be made and account balances can be viewed through the Trump Account app.
Who can contribute to a Trump Account?
Family members and others, including employers, can contribute to a Trump Account. Total annual contributions from all sources are limited to $5,000, excluding the initial $1,000 government contribution for those eligible.
Employers can contribute up to $2,500 per employee per year, which is excluded from the employee’s taxable income.
Employer plan setup
Employers interested in sponsoring a Trump Account Contribution Plan (TACP) must adopt a separate written plan document as prescribed by Internal Revenue Code 128(c) outlining eligibility requirements and contributions provisions. To qualify for the income exclusion, employer contributions must comply with nondiscrimination and other requirements modeled after dependent care assistance plan rules.
Employers must be careful to comply with applicable non-discrimination rules. IRS Technical Release 2026-02 provides safe harbor guidance to help employers structure TACPs in a manner that avoids ERISA-covered status.
Account withdrawal and uses
Generally, funds cannot be withdrawn from a Trump Account before the child reaches age 18. On January 1 of the year the child turns 18, account ownership transfers to the child. At that time, distributions are taxed similarly to traditional, individual retirement arrangements (IRAs). Non-qualified distributions made before the beneficiary is age 59 ½ are generally subject to an additional 10% tax on early distributions.
