The U.S. Department of the Treasury (UST) and the Internal Revenue Service (IRS) issued a notice on Tuesday, December 2, providing guidance on the establishment of “Trump Accounts” and announced that related regulations are forthcoming.
“Trump Accounts” are a new type of individual retirement account (IRA) specifically designed for eligible children. The notice on Tuesday mainly focuses on several aspects of concern to potential beneficiaries of “Trump Accounts” and individuals, such as parents and guardians, who wish to establish and/or contribute to these accounts.
The notice outlines how “Trump Accounts” operate and addresses preliminary questions regarding the account, including how to create an initial “Trump Account,” transfer funds to a “Trump Account,” the $1,000 pilot program contribution, other contributions (including qualified regular contributions and Section 128 employer contributions), compliant investments, profit distribution, reporting, and coordination with rules applicable to other types of IRAs.
“Trump Accounts” are part of the “Working Families Tax Cuts” under the “Greater and Prettier Act” (OBBBA) passed by Congress in the summer of 2025, which introduces a new investment account for children. This not only helps American children save but also instills in the younger generation and their families the belief in investing for the future amid growing economic anxiety.
According to the legislation, eligible children can have “Trump Accounts” established by parents or guardians, and the children must be under 18 years old by the end of the year in which the decision to establish the account is made. Contributions to “Trump Accounts” will start from July 4, 2026.
Other individuals can also make contributions. Family members, employers, and others are allowed to fund the account, with an annual maximum contribution limit usually set at $5,000 (excluding special circumstances).
Furthermore, the federal government will provide a one-time $1,000 pilot program contribution to each eligible U.S. citizen child born between January 1, 2025, and December 31, 2028, who is chosen to have a “Trump Account” established for them. Certain governmental and charitable organizations can also make compliant general donations to beneficiaries of “Trump Accounts.”
Employers can contribute up to a maximum of $2,500 annually to employees’ or their dependents’ “Trump Accounts” (included in the $5,000 annual limit), and these contributions are not considered taxable income for the employees (i.e., tax-free). The annual contribution limit will be adjusted based on the inflation rate and will start adjusting after 2027.
Funds in “Trump Accounts” must be invested in certain mutual funds or exchange-traded funds tracking the S&P 500 index or other major U.S. stock indexes.
Generally, funds in “Trump Accounts” cannot be withdrawn before the child reaches 18 years old on January 1 of the year following their birthday. After that, the account is typically treated as a traditional IRA, subject to the same rules as other traditional IRAs.
The notice also seeks public opinion on various issues related to “Trump Accounts.”
Currently, the IRS has released a draft version of Form 4547, known as the “Trump Account Selection Form,” in the tax form draft list. The final version will be available for establishing “Trump Accounts” and participating in the pilot program.
The IRS will continue to provide the latest information and additional details on tax benefits under the “Working Families Tax Cuts” on the IRS.gov website.
Visitors are invited to explore trumpaccounts.gov for more information on “Trump Accounts.”