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Commencing July 4, 2026, family members, employers, and qualified charities may begin making contributions to “Trump Accounts.” These tax-deferred investment accounts were created under the One Big Beautiful Bill Act signed into law last year and allow minors to jumpstart their retirement savings. Until the beneficiary attains the age of 18 (the “growth period”), the funds are invested in low-cost, mutual funds or ETFs that track an index of primarily U.S. companies. After the growth period, these accounts operate like a traditional IRA.
Note: Children born between January 1, 2025, and December 31, 2028, may be eligible for a $1,000 seed payment from the federal government (the “Pilot Program Contribution” or “PPC”).
Who is an eligible individual?
Children under the age of 18, with a valid social security number, are eligible for a Trump Account. Additionally, a child must be a U.S. citizen to qualify for the PPC.
How do you create a Trump Account?
Trump Accounts may be established by an online portal (accessible via trumpaccounts.gov) or IRS Form 4547. A beneficiary may only have one funded Trump Account.
A minor’s legal guardian, parent, adult sibling, or grandparent, in such order of priority, may establish a Trump Account.
What are the contribution and distribution restrictions?
Total contributions to a Trump Account are limited to $5,000 per year during the growth period, subject to a cost-of-living adjustment after 2027. There are certain exceptions to the contribution limit, including the $1,000 PPC, a qualified rollover, and qualified general contributions.
Employers may also contribute up to $2,500 per year, per employee. The contribution is excluded from the employee’s taxable income. However, these contributions are applied against the general $5,000 limit.
Beneficiaries generally cannot access the funds before age 18. Once the beneficiary reaches age 18, the account is subject to the traditional IRA rules and withdrawals are taxed as ordinary income.
What to know before funding a Trump Account
• An affirmative election must be made to create a Trump Account and to receive the PPC for eligible individuals.
• Contributions to a Trump Account will not trigger a gift tax filing requirement if the safe harbor under Revenue Procedure 2026-25 is met.
• Clients should consult with tax or estate planning counsel to determine how Trump Accounts dovetail with other traditional estate planning opportunities for the benefit of minors, such as UTMA accounts, 529 plans, and irrevocable trust planning.
Lorenzo is a Trusts & Estates attorney. He can be contacted at [email protected] or 941-231-1204.