What is a Trump Account? Who qualifies, how to get the $1,000, how much you can add and how it's taxed

A Trump Account is a children's account created by the One, Big, Beautiful Bill, signed July 4, 2025. For tax purposes it's a special traditional IRA under IRC §530A, with its own rules until the year the child turns 18: only U.S. stock index funds, essentially no withdrawals, and an annual contribution cap. As of October 2026, accounts can be opened and funded, the $1,000 government deposits have started, and Treasury is opening accounts automatically, but most rules on investments and employer contributions are still proposed.

Treasury sets up each child's first account (the "initial account") with financial institutions it selects. According to April 2026 announcements from Treasury and the companies involved, BNY serves as Treasury's financial agent and Robinhood provides initial trustee and brokerage services and the app. Parents claim and manage accounts through the Trump Accounts app or trumpaccounts.gov.

Description: The upper rows are in effect or already operating, the lower rows are still proposals, and the last column shows what it means for parents.

Rule	Status	What it covers	What it means for parents
The statute (IRC §§530A, 128 and 6434)	In effect (signed 2025-07-04)	The account, the $5,000 cap, $2,500 from employers, the $1,000 pilot, investment and withdrawal limits	The core rules are settled
Notice 2025-68	Issued (December 2025)	Initial guidance taxpayers can follow for now	Explains contribution sources, basis and withdrawal rules
Form 4547 (December 2025 revision)	In use	The election to open an account and the $1,000 election	File with a tax return, in the app, on the website or in your IRS Individual Account
App and contributions	Open: app launched 2026-05-28; contributions since 2026-07-04	Claiming, activating, contributing and choosing investments	Activation emails come only from official addresses; watch for scams
Gift tax safe harbor (Rev. Proc. 2026-25)	Issued (2026-06-29)	Qualifying cash contributions by individuals are treated as annual exclusion gifts ($19,000 for 2026), with no Form 709	Most family contributions need no gift tax return
Automatic accounts and government or charity contributions	Temporary regulations in effect (2026-09-30); companion proposal open for comments until 2026-11-30	Treasury auto-opens accounts for eligible children from 2026-10-01; governments and charities can fund whole groups of children	Families and employers can only contribute after the account is claimed in the app
Rules for the $1,000 pilot	Proposed (March 2026)	How the election works and who can make it	Currently run through Form 4547 and the IRS pages
Employer contribution programs (§128)	Proposed (August 2026)	Written program, employee notice, nondiscrimination testing, W-2 box 12 code TA, pre-tax salary deferrals for a child's account through a cafeteria plan	Employers may want to wait for final rules or follow the proposal carefully
Eligible investments	Proposed (published 2026-08-20, comments until 2026-10-20)	U.S. stock indexes, no leverage, fees of 0.1% or less, ESG indexes excluded	Initial accounts have a default investment; check funds if you move the account

The child needs an SSN valid for work and must not turn 18 before the end of the year the account is opened (for a 2026 account, born after December 31, 2008). The account doesn't require U.S. citizenship. The $1,000 government deposit goes only to U.S. citizen children with an SSN born January 1, 2025 through December 31, 2028, and it requires a separate election on Form 4547, even for an automatically opened account.

• Who makes the election: In order of priority, a legal guardian, parent, adult sibling or grandparent. Since October 1, 2026, Treasury also opens accounts automatically ("auto accounts") for children who meet the age and SSN requirements and have no election on file.
• An auto account isn't automatically funded: Until it's claimed, an auto account can receive only government and charity contributions to groups of children and, if separately elected, the $1,000. For family or employer contributions, a parent first verifies their identity in the app and claims and activates the account.
• Conditions for the $1,000: U.S. citizen; born 2025–2028; has an SSN; the person filing expects the child to be their qualifying child for the year; no earlier $1,000 election processed. You don't need to have claimed the child on a 2025 return.
• How to file: Form 4547 can go with your e-filed return for the year (the IRS calls this the fastest way), or online through the Trump Accounts app, trumpaccounts.gov or your IRS Individual Account. Paper forms go to the address the IRS lists. Don't attach it to a Form 1040-X or amend a return just to include it.
• Deadline: You can elect to open an account any time before the year the child turns 18. Elect the $1,000 as early as you can; Treasury deposits it as soon as practical after the election is processed and the account is confirmed.
• One per child: Only one Trump Account can hold funds for a child at a time. It can later be moved to another institution's Trump Account under the rules.

Up to $5,000 per child per year in total (indexed after 2027), counting parents, grandparents, relatives, friends, the child and employers, with no earned income requirement. Employers can add up to $2,500 a year that isn't the employee's income. The $1,000 government deposit, contributions from governments or charities to whole groups of children, and rollovers from another Trump Account don't count toward the $5,000. Contributions stop after December 31 of the year the child turns 17.

• Family and friends: $5,000 a year combined, counted by calendar year, so money must arrive by December 31 to count for that year. The institution enforces the cap and returns excess contributions.
• Employers: Under a written Trump Account contribution program, up to $2,500 per employee per year, excluded from the employee's wages and generally deductible for the employer. Under the August 2026 proposal, employees could also send part of their pay pre-tax to their child's account through a cafeteria plan. Employer money also counts toward the child's $5,000.
• Governments and charities: State, local and tribal governments and 501(c)(3) organizations can make equal contributions for a whole class of children (for example, a state, a set of ZIP codes or certain birth years) outside the $5,000.
• Private pledges (read with care): Michael and Susan Dell pledged $6.25 billion in December 2025 to put $250 into the accounts of about 25 million children age 10 and under living in ZIP codes with lower median incomes. CNBC reported on August 31, 2026 that the Dell Foundation said deposits would begin arriving automatically that day. Reports differ on the exact eligibility (birth years and the ZIP code income test), so rely on the official eligibility tool.
• Gift tax: A family member's contribution is a gift to the child. Under Rev. Proc. 2026-25 (June 2026), if your total gifts to that child for the year, including the cash you put in the account, stay within the $19,000 annual exclusion and you have no other gifts that require a return, the contributions count as annual exclusion gifts and no Form 709 is needed.
• No deduction: At the federal level, no one can deduct contributions to a Trump Account.

Until the year the child turns 18 (the "growth period"), the money can only be invested in mutual funds or ETFs that track a U.S. stock index such as the S&P 500, with no leverage and annual expenses of no more than 0.1% of the amount invested. Cash, money market funds and sector index funds aren't allowed, and the August 2026 proposal also excludes ESG indexes. After the growth period, ordinary IRA investment rules apply.

• Default investment: The initial account's trustee provides a compliant default investment, so the money is invested even if you don't choose.
• Moving the account: During the growth period, you can move the account by direct trustee-to-trustee transfer to another institution that offers Trump Accounts. Confirm that its funds meet the rules.
• Risk: It's all stocks, so short-term swings can be large. Unlike many 529 plans, the account doesn't automatically shift to safer investments as the child nears the age when money is needed, so plan other funds for near-term needs.

Contributions aren't deductible, and growth isn't taxed year to year. Before the year the child turns 18, nothing comes out except rollovers, distributions at death, returns of excess contributions and a rollover to an ABLE account in the year the child turns 17. From the year the child turns 18, traditional IRA rules apply: the family's after-tax contributions (basis) come out tax-free, government, employer and charity money and all earnings are taxed as ordinary income, and withdrawals before 59½ generally carry a 10% penalty, with exceptions such as higher education and a first home purchase.

• What has basis: After-tax contributions from parents, relatives, friends or the child create basis. The $1,000 government deposit, employer contributions and government or charity contributions to groups of children have none, so they're fully taxable when withdrawn.
• How withdrawals are split: Under the IRA pro-rata rule, each withdrawal is partly tax-free and partly taxable based on the share of basis in the account. A Trump Account isn't combined with the child's other IRAs for this calculation.
• Exceptions to the 10% penalty: The usual IRA exceptions, including qualified higher education expenses and a first-time home purchase ($10,000 lifetime).
• If the child dies during the growth period: The heir includes the account's value at death, minus basis, in income for that year.
• After the growth period: The account becomes an ordinary traditional IRA. Further contributions follow normal IRA rules, which generally require earned income. It can also be rolled into another IRA or eligible plan.

Example (hypothetical numbers, to show the method): A U.S. citizen child is born in 2026 and gets the $1,000. Parents add $2,000 a year and an employer adds $1,000 a year through the year the child turns 17, 18 years in all. Say the account is worth $100,000 when the child turns 18:

At 22, the child withdraws $20,000 for college tuition. Under the pro-rata rule, 36% ($7,200) is tax-free and 64% ($12,800) is taxed at the child's ordinary rate that year; because it's for qualified higher education, the 10% penalty generally doesn't apply. If the money went toward a car instead, the $12,800 would also carry a 10% penalty, or $1,280.

The Trump Account's strengths are the $1,000 government deposit, tax-free employer contributions and very low fees. Its drawbacks are that earnings are eventually taxed as ordinary income, investments are limited to U.S. stock indexes, and nothing comes out before 18. For college savings, a 529 usually fits better; once a child has earned income, a Roth IRA is hard to beat; a UTMA is flexible, but the money becomes the child's at adulthood and income is taxed each year. Many families combine them.

• If you only fund one: For college, start with a 529. For a U.S. citizen child born 2025–2028, at least claim the $1,000, which is worth doing even if you add nothing.
• If your employer contributes: The $2,500 is a tax-free benefit worth taking.
• Long-term savings: A Trump Account is really the child's future retirement account, a complement to a 529 rather than a replacement.

It comes down to the child's SSN. A U.S.-born child has an SSN and qualifies, and as a citizen can also get the $1,000. A child with a green card and an SSN qualifies for the account but not the $1,000. A child with only an ITIN or no SSN yet (many H-4 and F-2 children, for example) can't have one. Parents with only an ITIN can use it on Form 4547.

• The child's SSN must be valid for work: The Form 4547 instructions require an SSN valid for employment, issued before the election is made. If the card says "Not valid for employment," check first.
• Parents without an SSN: On Form 4547, a parent who has no SSN and isn't eligible for one enters an ITIN (see our guide at yclcpa.com/itin). For identity verification when claiming an account in the app, follow the official instructions.
• The $1,000 and the qualifying child test: The person electing the $1,000 must expect the child to be their qualifying child for the year. If one parent lives in China and the other in the U.S. with the child, it's safer for the U.S. parent to file.
• Grandparents in China: They can contribute for the child through the methods the account allows, and it counts toward the $5,000. To the child, it's a gift from a foreign person, which only requires Form 3520 if gifts from foreign persons total more than $100,000 in a year (see our guide at yclcpa.com/gift).
• Moving back or leaving the U.S.: The account is a U.S. IRA in the child's name and doesn't close when you leave. U.S. tax on withdrawals, and any reporting in China, need a look at the time. A parent giving up a green card doesn't affect the child's account; if the child later gives up U.S. status, the IRA is generally handled under the exit tax rules (see our guide at yclcpa.com/exittax).
• Tax filing: When parents file a U.S. return, Form 4547 can go with the 1040. The child's account itself needs no tax filing during the growth period.

As of October 2026, the most direct route is to download the Trump Accounts app, verify your identity and claim your child's account (including one Treasury opened automatically), then elect the $1,000 in the app or on Form 4547 if your child qualifies. Once the account is activated, you can contribute and choose investments. Official emails come only from government and designated addresses, so don't click unfamiliar links.

Description: Work top to bottom; the right column lists what to have ready and what to watch for.

Step	What to do	What you need / watch for
1. Check eligibility	Child has an SSN valid for work and is under 18 at the end of the year; check whether the child is a U.S. citizen born 2025–2028	The child's name, SSN and birth date must match Social Security records
2. Claim or open	Download the Trump Accounts app (or use trumpaccounts.gov), verify your identity and authority, and claim the auto account; if there isn't one, file the election to open	Your own ID details; Form 4547 isn't required just to open an account
3. Elect the $1,000	If eligible, file Form 4547 with the pilot option in the app, on the website or in your IRS Individual Account, or with your e-filed return	Auto accounts still need this election; don't attach it to a 1040-X
4. Activate and invest	Follow the trustee's activation steps and confirm the default investment or pick another compliant fund	Official Help Center or 866-USA-4547
5. Contribute	Family contributions, employer programs, government and charity deposits	$5,000 a year combined; individual contributions generally need no Form 709
6. Every year after	Keep contribution records (separating basis from non-basis money); from the year the child turns 18, IRA rules apply to withdrawals	Withdrawals go on the 1040, possibly with a 10% penalty

Start with the child's birth year, status and SSN, then your family's savings goals and whether your employer offers contributions.

• Situation A: a child born in the U.S. in 2025–2028. Claim the account in the app soon and elect the $1,000 on Form 4547. Whether to add more depends on your budget and other accounts.
• Situation B: a child born in 2024 or earlier with an SSN. The account is available but not the $1,000. Employer or charity deposits may apply (such as the Dell $250 reported in the media). If college is the main goal, fund a 529 first.
• Situation C: your employer offers Trump Account contributions. Up to $2,500 a year isn't your income, so it's worth using. If there's a pre-tax payroll option, coordinate it with your 401(k) and 529.
• Situation D: a child with a green card or another status. With an SSN valid for work, the account is available but not the $1,000; with only an ITIN, not for now.
• Situation E: parents with only an ITIN, or one parent in China. Use the ITIN on Form 4547, and have the parent living in the U.S. with the child elect the $1,000. If grandparents in China want to contribute, mind the $5,000 annual cap.