Trump Accounts: Frequently Asked Questions

Tax News You Can Use | The Northern Trust Institute

 

Jane G. Ditelberg, Chief Tax Strategist

 

February 23, 2026

Trump accounts offer a new and tax-efficient way to invest for a minor's future without the requirement of earned income.

Trump Accounts:  Frequently Asked Questions

New Trump accounts, which are a creation of the One Big Beautiful Bill Act (OBBBA), are generating lots of questions. These are essentially traditional IRAs for minors who do not have earned income. Parents or guardians may open accounts for their children and make contributions of their own: However, the statute also includes a pilot program authorizing federal government contributions (limited to children born between 2025 and 2029). The statute also permits additional contributions from employers, government entities and charities. While no contributions can be made until after July 4, 2026, parents or guardians may file the election to open an account with their 2025 income tax return, so it is not too early to start thinking about the process.

Who Can Open A Trump Account?

A Trump account may be opened for an eligible individual (under age 18) by that child’s parent or guardian. The parent or guardian can open the account without making a contribution themselves — for example, by claiming a government contribution.  Grandparents and adult siblings will also be able to open accounts for an eligible minor who does not already have an account under rules not yet promulgated.

Who Can Have A Trump Account?

An eligible beneficiary of a Trump account must (a) be a U.S. citizen, (b) have a Social Security number before the election is made, (c) have an election in place to establish a Trump account, and (d) not turn 18 before the end of the year in which the election is made. In addition, there can only be one funded Trump account at a time for a single eligible individual.

How Does One Open A Trump Account?

A Trump account must be initially “created or organized” by the Treasury Secretary pursuant to a written agreement, similar to an IRA agreement with a bank or other authorized trustee. Treasury has indicated that it will release sample language for these agreements, like it has for IRAs. The guidance indicates that Treasury will select one or more financial institutions to serve as the initial trustee of Trump accounts.

A parent or guardian can open a Trump account for a qualifying child by filing IRS form 4547 (Form 4547 (December 2025) with the parent’s or guardian’s income tax return, beginning with 2025 returns due April 15, 2026. IRS notice 2025-68 indicates that a second method will be available by logging onto a new website, www.trumpaccounts.gov: Details of this method for opening the account have not yet been released, but the notice indicates that grandparents and adult siblings of a minor will be able to use this method to open an account for a minor who does not already have one.

Who Can Contribute To A Trump Account?

OBBBA provides a pilot program for contributions from Treasury of $1,000 for children born between 2025 and 2029. Federal, state and local governments and agencies as well as charities may make what are known as “general” contributions for a qualified class of beneficiaries — for example, for children born in a certain zip code. Employers may make contributions to Trump accounts for employees or children of employees pursuant to a plan under Section 128 of the tax code. Finally, the statute also authorizes “contributions from other sources,” including contributions by the account beneficiary, their parents and any other person.

When Can Contributions Be Made?

Although an election to create an account can be filed now, no contributions can be made until July 4, 2026.

What is the Growth Period?

The growth period runs from the opening of the account until January 1 of the year the beneficiary attains age 18. During the growth period, the specific rules for Trump accounts, including how the assets can be invested, apply. After the growth period ends, the account is treated generally as a traditional IRA account.

How is the Account Invested?

During the growth period, Trump account funds may only be invested in “eligible investments” determined by the Treasury Secretary. These are limited to mutual funds or ETFs that (a) track an index of primarily U.S. companies, (b) do not use leverage, and (c) have annual fees and expenses of 0.1% or less of the balance of the fund. After the growth period, the investments are covered by the rules for traditional IRAs.

How Much Can Be Contributed To A Trump Account?

The annual total aggregate contributions to a Trump account may not exceed $5,000. This includes all contributions from employers and individuals. Employer contributions are limited to $2,500 and must be made pursuant to a Section 128 Trump account contribution plan. Governent contributions under the pilot program, as well as contributions by charities and government agencies and subsidiaries, do not count towards the $5,000 limit. For example, if in 2026 a child’s parents contribute $2,000 and the account receives $1,000 from the pilot program and $1,000 from the parent’s employer, then the amount that a grandparent can contribute that year is $2,000 ($5,000 minus $2,000 from the parents and $1,000 from the employer). 

Do Contributions Qualify For The Annual Exclusion From Gift Tax?

Unlike Section 529 of the tax code, which governs college savings plans, Section 530A of the code does not include a specific statement that gifts to Trump accounts qualify for the annual exclusion. The annual exclusion is only available for gifts of present interest. It is unclear whether the fact that no distributions may be made from the Trump account while the beneficiary is under 18 will prevent it from qualifying as a present interest. Gifts to accounts under the Uniform Transfers to Minors Act (UTMA) and to minor’s trusts under section 2503(c) of the tax code can qualify for the annual exclusion, even though the beneficiary does not gain control of the assets until reaching adulthood. However, unlike UTMAs or 2503(c) trusts, assets in a Trump account cannot be used immediately to benefit the minor. Treasury has been asked to clarify this issue in regulations.

How To Claim The $1,000 Contribution From Treasury Under The Pilot Program?

To claim the pilot program contribution for an eligible child born between 2025 and 2029, the parent or guardian opening the account must check the box in part III of form 4547.

What Is A Rollover Of A Trump Account?

The statute and guidance use the word “rollover” in two contexts. First, if a Trump account beneficiary qualifies to create an ABLE account, funds can be rolled over tax-free from the Trump account to the ABLE account. Second, similar to a trustee-to-trustee transfer for an IRA, a “rollover” occurs where the assets are moved directly from one provider to another.

How Are Withdrawals From Trump Accounts Taxed?

Contributions to a Trump account during the growth period are not includible in income by the account beneficiary, and income earned by the Trump account is not taxed at the time it is earned. Distributions from a Trump account are taxed as ordinary income in the same manner as distributions from traditional IRAs. 

Contributions from family members and the account beneficiary create basis, which is taken into account in computing tax when assets are withdrawn in retirement or for other earlier permitted purposes. Contributions from Treasury under the pilot program, from employers, from state and local government agencies, and from charitable organizations do not create basis. The basis from the original account carries over in a qualified rollover.

What Can Trump Account Funds Be Used For?

No distributions are permitted during the growth period (other than a rollover or a distribution of excess contributions). After the growth period, withdrawals are governed by the traditional IRA rules. Before age 59½, withdrawals made for higher education expenses, first time home purchase, birth or adoption of a child, and disability under certain specified circumstances avoid an early withdrawal penalty and are subject only to income tax. 

How Will The Trump Account Work After Age 18?

On January 1 of the calendar year in which the beneficiary will attain age 18, the growth period will end and the account will thereafter generally be treated as a traditional IRA. The guidance issued indicates that the governing instrument may convert to an IRA, or the beneficiary may transfer the account to an IRA provider. Notice 2025-68 indicates that, generally, the rules applicable to IRAs will apply, expressly including the rules for Roth conversions, rollovers, RMDs, and taxation as ordinary income. No SEP or SIMPLE contributions may be made to the account, and the account is not aggregated with other IRAs for basis purposes.

What Happens To A Trump Account If the Beneficiary Dies Before Reaching 18?

If the beneficiary dies during the growth period, the account terminates. The income is taxable to “the recipient or to the deceased beneficiary’s estate.” This implies there will be an  ability to name who will receive those assets upon the original beneficiary’s death, but the procedure for doing that is not yet established.

What Official Guidance Is Available On Trump Accounts?

For more information, consult the following publications:

• IRS Notice 2025-68: Notice of intent to issue regulations with respect to section 530A Trump accounts
• IRS webpage on Trump accounts: About Form 4547, Trump Account(s) | Internal Revenue Service
• Special Trump account website: Trump Accounts - Jumpstarting the American Dream
• Form 4547: Form 4547 (December 2025)
• Instructions for form 4547: Instructions for Form 4547Form 4547 (Rev. December 2025)
• IRS Press Release: Treasury, IRS issue guidance on Trump Accounts established under the Working Families Tax Cuts; notice announces upcoming regulations | Internal Revenue Service