If you have a child under 18, you can now open a Trump Account, a new tax-advantaged savings account for kids that works much like an IRA. Eligible children born between January 1, 2025 and December 31, 2028 get a $1,000 head start from the U.S. Treasury, and the account can keep growing until your child reaches adulthood and beyond. Here is what it is, who qualifies, and exactly how to sign up.
What Is a Trump Account?
A Trump Account is a new type of individual retirement account created for children. A parent, guardian, or other authorized adult opens and manages the account, and the money is invested in a diversified fund that tracks a U.S. stock market index rather than sitting in cash. The parent or guardian acts as the sole custodian until the child turns 18, at which point the account effectively becomes the child’s own, much like how a traditional IRA works for an adult.
Who Is Eligible?
To open a Trump Account, the child must:
- Not have turned 18 before the end of the calendar year in which you make the election
- Have a valid Social Security number
Children born between January 1, 2025 and December 31, 2028 who are U.S. citizens with a valid Social Security number also qualify for the one-time $1,000 seed deposit from the Treasury. Older children can still have an account opened for them; they simply are not eligible for that initial $1,000 contribution.
How to Sign Up for a Trump Account (Step by Step)
There are a few ways to get started, and they all lead to the same underlying account.
1. Through the IRS website. Go to irs.gov/trumpaccounts and sign in to (or create) your IRS online account using ID.me. From there, complete and submit Form 4547, Trump Account Election(s), for your child. You can also use your IRS account afterward to check the status of the election. The IRS estimates the whole process takes 5 to 10 minutes.
2. Through the official Trump Accounts app. Treasury’s Trump Accounts app, available on the App Store and Google Play through TrumpAccounts.gov, lets you elect an account, check your child’s balance, and set up recurring contributions from your phone.
3. Through a participating financial institution. Firms such as Fidelity and Chase also support Trump Accounts. You still make the initial election with Form 4547, but you can choose to have the account held and managed long-term at the institution of your choice.
What You Will Need Before You Start
Have these on hand so the sign-up only takes a few minutes:
- An ID.me account (or the ability to create one)
- Your child’s Social Security number
- Your child’s date of birth
- Your child’s address
How Much Can You Contribute Each Year?
Beyond the government’s $1,000 seed deposit, family, friends, and employers can add up to $5,000 per year in combined contributions (this cap is set to adjust for inflation after 2027). Employers can contribute up to $2,500 of that per year on a tax-free basis for an employee’s child or dependent, which counts toward the same $5,000 annual limit. Most contributions from family and friends are made with after-tax dollars and are not themselves tax-deductible.
How the Money Is Invested
By law, Trump Account funds must go into a diversified investment option that tracks a broad U.S. stock market index, similar to a low-cost S&P 500 index fund, rather than into individual stocks or cash. That keeps the account simple and hands-off. It also means the balance will move with the market, so it can go down as well as up over any given stretch of time.
Tax Rules and Withdrawals
A Trump Account behaves a lot like a traditional IRA once your child reaches adulthood:
- Funds are locked until the child turns 18.
- Between age 18 and 59 1/2, withdrawals are generally taxed as ordinary income and hit with a 10% early withdrawal penalty, unless a qualifying exception applies, such as qualified higher education expenses or up to $10,000 toward a first home purchase.
- After age 59 1/2, withdrawals are taxed as ordinary income with no penalty.
Because Treasury and the IRS have continued to issue new guidance on these accounts since they launched, some of these details may be refined over time. It is worth confirming the current rules before making a withdrawal decision.
What this means for you: If you have a child born in 2025 or later, opening a Trump Account is a straightforward way to claim the $1,000 government deposit and give them a long runway for tax-advantaged growth. If you have an older child, the account can still make sense as a simple, low-maintenance investment vehicle, just without the seed money. Either way, how much you contribute and when your family eventually draws on the account are real planning decisions. Reach out to Pelican Tax before you open or fund an account so we can walk through how it fits with your broader tax and savings picture.
