New Trump Accounts Help Families Save for a Child’s Future
June 22, 2026
Share:A new savings vehicle created under the One Big Beautiful Bill Act provides families with an additional way to save for a child’s future. Known as a “Trump Account,” the program allows eligible children to receive contributions that can grow over time and kick-start a child’s retirement savings.
Beginning July 4, 2026, families and other contributors may start funding these accounts for eligible children.
Who Qualifies?
Trump Accounts may be established for children with a valid Social Security Number who are under age 18 before the end of the calendar year in which the account election is made.
In addition, a pilot program for children born between January 1, 2025, and December 31, 2028 allows for a one-time federal government contribution of $1,000.
How Much Can Be Contributed?
Parents, guardians, relatives, and other individuals may contribute to a child’s account. Contributions are subject to an annual limit of $5,000 from all sources, not including the one-time government contribution of $1,000. Employers may also contribute up to $2,500 annually, per employee, to an employee’s or dependent’s Trump Account.
Funds must be invested in qualifying mutual funds or exchange-traded funds that track a broad U.S. stock market index such as the S&P 500.
Tax Treatment
Trump Accounts are expected to operate similarly to traditional retirement accounts in most ways.
Some key aspects of Trump Accounts include:
- Contributions are not deductible, but the funds grow tax-deferred until the beneficiary uses them
- Employer contributions are excluded from the employee’s taxable income
- Distributions are not allowed before age 18
- Once the child turns 18, the account is generally converted to a traditional IRA
- Withdrawals after 18 and before retirement age are subject to income taxes and generally subject to a 10% penalty unless they are for certain qualified expenses
How to Set Up a Trump Account
1. Complete and submit Form 4547 to elect Trump Account treatment for the child either directly on your tax return or through your IRS Individual account.
2. Download the Trump Accounts mobile app and create an account.
3. Wait for account approval and activation.
4. Begin making contributions as soon as July 4, 2026.
What Should Families Do Now?
Although contributions cannot begin until July 4, 2026, families may want to evaluate whether a Trump Account could complement their existing savings strategy. This is especially true for families with children that would qualify for the pilot program $1,000 contribution.
While Trump Accounts can provide a valuable long-term savings vehicle, families whose primary goal is funding future education expenses should also consider whether a 529 plan may offer greater tax advantages.
Understanding the contribution limits, investment requirements, and withdrawal rules can help determine whether this new savings opportunity aligns with your family’s long-term financial goals.
Be sure to watch for an upcoming blog where we examine a planning strategy that may allow eligible account holders to leverage a Trump Account as part of a long-term Roth retirement savings strategy once they reach age 18.
If you have questions about how Trump Accounts may affect your family’s tax and financial planning strategy, please contact your Wilkins Miller advisor.