Trump Accounts: What You Should Know About Access and Tax Treatment

Earlier this year, Congress enacted the One Big Beautiful Bill Act, a comprehensive piece of tax legislation containing numerous individual and business tax provisions. One of those provisions establishes a new type of tax-advantaged savings account for children, known as “Trump Accounts.”

What Are Trump Accounts?

Trump Accounts are a new addition to the range of tax-advantaged savings tools available to taxpayers. They are designed specifically as investment vehicles for minors and are subject to defined rules governing contributions, investments, and distributions.

Key Features of Trump Accounts Include:

• Accounts may be established for a child who has not reached age 18 and has a valid Social Security number
• Contributions are made on an after-tax basis, up to an annual limit initially set at $5,000 per beneficiary.
• Contributions may be made by parents, relatives, individuals, and others
• Employer contributions are permitted within the overall annual limit and may present a new planning opportunity for both employers and employees
• Funds must be invested in broadly diversified U.S. stock index funds or similar vehicles focused on long-term equity growth

The Government Seed Deposit Provision

A unique element of the new law is the government seed deposit provision. This applies to children born between January 1, 2025, and December 31, 2028, who are U.S. citizens with a valid Social Security number. Eligible children may receive a one-time $1,000 initial contribution from the federal government. This deposit is intended to jumpstart the account by providing a foundational balance that can grow over time.

How Trump Accounts Work: Access, Taxes, and Flexibility

Trump Accounts are treated similarly to other tax-deferred accounts, such as IRAs, with specific distribution rules. Generally, funds cannot be accessed until the beneficiary reaches age 18. After that point, and at certain later ages, funds may be accessed for qualifying life events, including higher education expenses, small business startup costs, or a first-time home purchase. Qualified distributions receive favorable capital gains tax treatment on earnings, while non-qualified distributions may be subject to ordinary income tax and potential penalties.

Trump Accounts add another layer to the landscape of tax-advantaged savings options already available to families, such as 529 education savings plans and health savings accounts. They are distinguished by allowing for broader potential uses of funds beyond education and healthcare.

How to Open Accounts

An authorized individual can elect to open a Trump Account for an eligible individual by filing IRS form 4547 or by using the online tool at trumpaccounts.gov.  The account can be opened anytime before January 1st of the year that the beneficiary turns 18. Once the IRS processes an election to open an account for a child, no additional Trump Accounts can be opened for that same child. For calendar year 2026 the election can be made at any time using IRS Form 4547 or the online too. The online tool is expected to launch July 5th, 2026 per trumpaccounts.gov.

Trump Account Planning Considerations

Taxpayers should be aware of several planning considerations as Trump Accounts become available beginning in 2026. Preliminary IRS guidance is expected to outline required forms and administrative details, including how annual contributions may fit into broader savings and investment strategies. Employers may also choose to incorporate contributions into benefits packages, potentially adding value for employees with young children and serving as a recruiting tool.

Trump Accounts may become a meaningful component of long-term planning for families with children. They reflect a shift in federal tax policy toward encouraging early investment and family participation in financial planning. 

Next Steps

As guidance continues to develop and financial institutions begin offering these accounts, CPAs and tax advisors will play an important role in helping clients integrate Trump Accounts into comprehensive tax and financial strategies.

As you have questions or are looking for guidance, please reach out to your Redpath Client Manager or connect with us here for strategies and advice.