A Trump Account is a tax-advantaged investment account for U.S. children under 18, created by the 2025 tax law as a special type of traditional IRA owned by the child. The money is invested in low-cost U.S. stock index funds and generally stays locked until the year the child turns 18. Family and employers can add up to $5,000 a year, and U.S.-citizen children born from 2025 through 2028 can get a one-time $1,000 Treasury deposit.
Key takeaways
- On October 1, 2026, Treasury said over 60 million more eligible children had been automatically enrolled; a parent or guardian must claim the account to manage it.
- The one-time $1,000 Treasury deposit is for U.S.-citizen children with a Social Security number born from 2025 through 2028, and a parent or guardian must elect it.
- Contributions from family, friends and employers are capped at $5,000 per child per year; up to $2,500 of that can come from an employer without counting as the employee's income.
- Until the year the child turns 18, the money can only be invested in U.S. stock index funds charging 0.1% a year or less.
- Starting January 1 of the year the child turns 18, traditional IRA rules generally apply, including income tax on withdrawn earnings and a possible 10% early-withdrawal tax.
Trump Accounts are new investment accounts for American children, created by the 2025 federal tax law (Public Law 119-21, commonly called the One Big Beautiful Bill Act) and written into section 530A of the tax code. Families and employers can add money, and many young children can also get a $1,000 federal deposit.
They’re in the news because on October 1, 2026, the Treasury Department announced that it had finished automatically enrolling eligible kids, saying more than 60 million additional children now have an account waiting to be claimed. Here’s what that means and what parents need to do.
What is a Trump Account?
Legally, a Trump Account is a special kind of traditional IRA (individual retirement account) that belongs to the child. The IRS calls the years before the calendar year the child turns 18 the “growth period.” During that time the account has its own rules: limited investment choices, a separate contribution cap and almost no withdrawals (IRS Form 4547 instructions).
The growth period ends on December 31 of the year the child turns 17. After that, the account generally works like any other traditional IRA.
Who is eligible for a Trump Account?
Under the law, a child can have a Trump Account if they haven’t turned 18 by the end of the year the account is set up and they’ve been issued a Social Security number. For an account opened in 2026, that means a child born after December 31, 2008.
There’s no income test in the law, and the child doesn’t need a job or earnings of their own to receive contributions.
Who gets the $1,000 Trump Account deposit?
The $1,000 “pilot program contribution” has stricter rules. According to the IRS, the child must:
- Be born in 2025, 2026, 2027 or 2028
- Be a U.S. citizen
- Have a Social Security number
- Not already have had a $1,000 election processed by anyone
The money isn’t automatic. A parent or guardian who expects to claim the child as a qualifying child has to elect it, on IRS Form 4547 or through Treasury’s online tools. Treasury’s new temporary regulations say the government can open accounts on its own but can’t make the $1,000 election for a family. Its October 1 announcement adds that the account must be claimed to receive the deposit.
Under proposed IRS rules, the election could be made as late as December 31 of the year the child turns 17. Electing early simply gives the money more years to grow.
What does Trump Account auto-enrollment mean?
Auto-enrollment means Treasury opened a basic account for each eligible child without one, using tax records and other data. The temporary regulations published September 30 say Treasury will keep opening accounts for newly eligible children periodically, so most families won’t need to file anything just to get one.
An auto-enrolled account is essentially a holding account, though. It can receive only the $1,000 Treasury deposit and “qualified general contributions,” which are group deposits that governments or charities make for a whole class of kids, such as all children in a state or birth year. Family gifts and employer money can’t go in until a parent or guardian claims the account.
How do you claim or open a Trump Account?
To claim an auto-enrolled account, Treasury says to download the official Trump Accounts app for iOS or Android, confirm who you are and how you’re related to the child, check the child’s details and agree to the account terms. Claiming moves the balance into an account you manage. Details are on TrumpAccounts.gov.
Form 4547, Trump Account Election(s), is the IRS form for opening an account and electing the $1,000. You can file it with your tax return, on paper, or through your IRS Individual Online Account. Opening an account is free, according to Treasury.
Watch for scams. Treasury says it and its providers won’t ask for passwords or one-time codes by email, text or phone; its call center is 1-866-USA-4547 (Treasury).
How much can you contribute to a Trump Account?
Parents, relatives, friends, the child and employers can together contribute up to $5,000 per child per year, and the cap is set to rise with inflation after 2027. Contributions have been allowed since July 4, 2026 (IRS).
Employers can contribute up to $2,500 a year to the account of an employee or an employee’s dependent through a written Trump Account contribution program. That money isn’t counted as the employee’s taxable income, but it does count toward the $5,000 cap.
The $1,000 Treasury deposit, qualified general contributions and rollovers between Trump Accounts don’t count toward the cap. Family members don’t get a federal tax deduction for contributing.
How is Trump Account money invested?
During the growth period, the money can only go into mutual funds or exchange-traded funds (ETFs) that track the S&P 500 or another index made up mainly of U.S. stocks. The funds can’t use leverage, which means borrowing to boost returns, and can’t charge more than 0.1% a year in fees and expenses, or $1 for every $1,000 invested (IRS). Funds tied to a single industry or sector aren’t allowed.
If you don’t choose a fund, the trustee (the financial firm holding the account) picks an eligible one for you.
When can a child withdraw money, and how is it taxed?
Generally not until January 1 of the year the child turns 18. Before then, money can leave only in narrow cases, such as a rollover to another Trump Account, a transfer to an ABLE account (a savings account for people with disabilities) at age 17, removal of excess contributions or the child’s death (IRS Notice 2025-68).
After that, traditional IRA rules generally apply:
- Earnings, the $1,000 seed, employer money and government or charity deposits are taxed as ordinary income when withdrawn.
- After-tax money that family members contributed counts as “basis” and isn’t taxed again.
- Withdrawals before age 59½ may owe a 10% additional tax unless an exception applies, such as for qualified higher education expenses or a first home purchase.
How much could a Trump Account grow by age 18?
Here’s a hypothetical example assuming a constant 7% annual return, an illustration rather than a prediction. Real returns vary and can be negative, and this ignores fees, taxes and inflation.
For the $1,000 deposit alone, the formula is FV = P × (1 + r)^n. Over 18 years: $1,000 × 1.07^18 ≈ $1,000 × 3.3799 = $3,380.
For yearly contributions made at the end of each year, FV = C × ((1 + r)^n − 1) / r. Adding $1,000 a year: $1,000 × (3.3799 − 1) / 0.07 ≈ $33,999, plus the $3,380 from the seed, for $37,379.
| Scenario (18 years, 7% assumed) | Total contributed | Hypothetical value |
|---|---|---|
| $1,000 seed only | $1,000 | $3,380 |
| $1,000 seed + $1,000 a year | $19,000 | $37,379 |
| $1,000 seed + $5,000 a year | $91,000 | $173,375 |
Try your own numbers in our compound interest calculator or investment calculator.
Trump Account vs. 529 plan vs. custodial Roth IRA
| Feature | Trump Account | 529 plan | Custodial Roth IRA |
|---|---|---|---|
| Child needs earned income? | No | No | Yes |
| Annual limit (2026) | $5,000 from family and employers combined | No fixed IRS dollar cap; gift-tax rules may apply | Lesser of the child’s taxable pay or $7,500 |
| Government seed money | $1,000 for eligible children born 2025–2028 | None from the federal government | None |
| Federal tax deduction for contributions | No | No | No |
| Tax on withdrawals | Ordinary income tax on earnings and untaxed money; possible 10% extra tax before 59½ | Earnings free of federal tax when used for qualified education expenses | Qualified distributions tax-free |
| Investments | Low-cost U.S. stock index funds until the year the child turns 18 | Options offered by the plan | Set by the IRA provider |
Sources: IRS on 529 plans, IRS IRA contribution limits, IRS on Roth IRAs.
These accounts aren’t either-or. During the growth period, Trump Account contributions don’t count against a child’s regular IRA limit, so a teen with a job could also fund a Roth IRA. Our Roth IRA calculator shows how that could add up.
What parents should do now
- Go to TrumpAccounts.gov, download the official Trump Accounts app and claim your child’s account.
- If your child is a U.S. citizen born from 2025 through 2028, make sure the $1,000 election has been made, either on Form 4547 or online.
- Pick an eligible index fund, or let the trustee’s default choice stand.
- Ask your employer whether it offers a Trump Account contribution program.
- Decide whether to add money, keeping total contributions from everyone under $5,000 per child per year.
- Stick to the official app, TrumpAccounts.gov and the official call center.
Frequently asked questions
Do I need to do anything if my child was auto-enrolled in a Trump Account?
Yes, if you want to use it. Treasury says a parent or guardian must claim an automatically enrolled account to manage it and to let family, friends and employers contribute. You do this in the official Trump Accounts app, where you confirm who you are and how you're related to the child. Until then, the account can only receive Treasury-administered deposits, such as the $1,000 pilot contribution and group contributions from governments or charities.
Who qualifies for the $1,000 Trump Account deposit?
A child qualifies for the one-time $1,000 Treasury deposit if they were born in 2025, 2026, 2027 or 2028, are a U.S. citizen, have a Social Security number, and haven't already had a $1,000 election processed. A parent or guardian who expects to claim the child as a qualifying child must make the election on IRS Form 4547 or through Treasury's online tools. Treasury cannot make this election for you.
Can grandparents contribute to a Trump Account?
Yes. Grandparents, other relatives and friends can contribute once a parent or guardian has claimed or opened the child's account. All contributions from people and employers combined are limited to $5,000 per child per year, a cap set to rise with inflation after 2027. Family contributors don't get a federal tax deduction, but the after-tax money they put in isn't taxed again when the child later withdraws it.
When can my child take money out of a Trump Account?
Generally starting January 1 of the year your child turns 18. Before then, money can leave the account only in narrow cases, such as a rollover to another Trump Account or the child's death. After that, traditional IRA rules generally apply: earnings and untaxed contributions are taxed as ordinary income when withdrawn, and a 10% additional tax may apply before age 59½ unless an exception, such as college costs or a first home, applies.
Is a Trump Account better than a 529 plan for college?
Not necessarily. With a 529 plan, earnings come out free of federal tax when used for qualified education expenses, while Trump Account withdrawals are generally taxed as ordinary income, although college costs can avoid the extra 10% early-withdrawal tax. A Trump Account's advantages are the possible $1,000 government deposit, employer contributions that aren't taxed to the employee, and very low fund costs. Many families may use both.