Parents, grandparents, and other family members can now contribute to Internal Revenue Code Section 530A accounts, commonly called Trump Accounts, a new tax-advantaged savings option created under the One Big Beautiful Bill Act. These accounts are designed to help eligible children build long-term savings and retirement assets.
Who Can Open an Account?
Children who will be under age 18 at the end of the tax year and have a Social Security number are eligible. Contributions began July 4, 2026. In addition, qualifying U.S. citizen children born between January 1, 2025, and December 31, 2028, may receive a one-time $1,000 government-funded deposit. Even if no additional contributions are made, that initial investment has the opportunity to grow tax-deferred over time.
Tax Benefits
During the account’s growth period, from opening until the end of the year before the child turns 18, contributions can be made even if the child has no earned income. Annual contributions are generally limited to $5,000, contributions are not tax deductible, and investments are limited primarily to qualifying index mutual funds and ETFs. Withdrawals generally are not permitted during this period.
Once the child reaches age 18, the account is generally treated like a traditional IRA, with the usual rules for contributions, withdrawals, taxation, required minimum distributions, and Roth conversions.
IRS Gift Tax Guidance
IRS Revenue Procedure 2026-25 provides a safe harbor allowing many contributions to qualify for the annual gift tax exclusion. If contribution and filing requirements are satisfied, contributors generally will not need to file Form 709. If the safe harbor requirements are not met, contributions are treated as future-interest gifts, requiring a gift tax return even if no tax is ultimately due.
Opening an Account
Accounts must first be established through the U.S. Treasury. Parents or guardians can make the required election by filing Form 4547 through the Trump Accounts website (trumpaccounts.gov) or through their IRS Online Account.
Who Can Contribute?
Parents, relatives, friends, employers, certain nonprofit organizations, government entities, and tribal governments may all be able to contribute, depending on the type of contribution. Employer contributions are generally excluded from an employee’s taxable income, subject to applicable limits.
Education Savings Comparison
While Trump Accounts offer tax-deferred growth, they may not be the best option for education savings. Section 529 plans and Coverdell ESAs provide tax-free withdrawals for qualified education expenses, and 529 plans offer additional flexibility, including potential state tax benefits and limited Roth IRA rollover opportunities.
Bottom Line
Trump Accounts provide families with another way to save for a child’s future, particularly retirement. Before opening an account or making contributions, families should review the rules carefully and discuss how these accounts fit into their overall financial and tax planning with their CPA and financial advisor.
