New for 2025: “Trump Accounts” for Children

By now, many families have likely heard about the new Trump Accounts—a federal savings initiative designed to help jump-start long-term savings for children. Beginning with the 2025 tax year, these accounts may offer a valuable opportunity, including a potential one-time $1,000 government contribution.

Following the initial rollout, the U.S. Treasury Department and IRS released the first proposed regulations on March 6–9, 2026. While most of the original framework remains unchanged, a few important updates have been introduced.

What Is a Trump Account?

A Trump Account is a tax-deferred savings account for children under age 18. It is treated like a traditional IRA, but not a Roth IRA. 

• The account is owned by the child
• Managed by a parent or authorized adult until age 18
• Funds generally cannot be withdrawn before age 18
• After age 18, the account follows traditional IRA-type rules

Key Updates from Proposed Regulations (March 2026)

• Election Deadline Clarified: The election to open a Trump Account must be made no later than December 31 of the year the child turns 17.
• Treatment of the $1,000 Government Contribution: The Treasury will treat the $1,000 as a tax overpayment and deposit it directly into the child’s Trump Account—it is not paid to parents.

What are the Benefits of a Trump Account? 

A Trump Account offers several benefits over a traditional IRA, particularly for children and dependents:

• No IRA Contribution Limit Coordination: Contributions to a Trump Account before the beneficiary turns 18 are not counted toward the annual IRA contribution limits for other IRA plans. This allows families to save in both a Trump Account and a traditional IRA without exceeding overall limits.
• Employer Contributions Excluded from Income: Employers can contribute up to $2,500 per year (adjusted for inflation after 2027) to a Trump Account for an employee or their dependent, and these contributions are excluded from the employee’s gross income.

Who Qualifies for the $1,000 Government Contribution?

A child may be eligible if all of the following apply:

• Born between January 1, 2025 and December 31, 2028
• Is a U.S. citizen
• Has a valid Social Security number
• An election is filed to open the account

Important: The $1,000 contribution is not automatic—you must file to receive it.

How to Open an Account

To establish a Trump Account and request the government contribution:

• File IRS Form 4547 (Trump Account Election(s))
• This can be submitted with your 2025 tax return, or separately

The account must be designated as a Trump Account at the time it is established, and governed by a written instrument that:

• Prohibits contributions before July 4, 2026 
• Limits annual contributions to $5,000 per calendar year (adjusted for inflation after 2027), excluding exempt contributions such as qualified rollovers and government pilot program contributions.
• Prohibits distributions before the first day of the calendar year in which the beneficiary turns 18, except for qualified rollovers or ABLE account rollovers.
• Requires funds to be invested only in eligible investments (such as low-cost index funds) until the beneficiary turns 18.

Starting in mid-2026, elections may also be made through a federal portal.

How Are Trump Accounts Funded?

In addition to the potential $1,000 government contribution, accounts can receive:

• Up to $5,000/year from family or others (after-tax)
• Up to $2,500/year from an employer (may be tax-free to the employee)
• Certain charitable or government contributions, if eligible
• Contributions are not deductible
• Earnings grow tax-deferred

When Do Accounts Begin?

• Elections are made with 2025 tax filings or separately using the IRS Form 4547 before the year the child turns 18
• Accounts are expected to be activated starting July 4, 2026
• Initially administered by the U.S. Treasury

The website for the program is located at https://www.trumpaccounts.gov/

What Should You Do Now?

If you had a child in 2025, or expect a child or grandchild in the next few years this may be a valuable planning opportunity—especially when considered alongside options like 529 plans.

Next Steps

MRPR is here to help you navigate this new opportunity. Our team can:

• Review your family’s eligibility for the $1,000 contribution
• Help determine whether a Trump Account fits into your overall financial and tax strategy
• Assist with properly filing Form 4547
• Coordinate the account election with your 2025 tax return
• Answer questions and provide ongoing guidance as rules and administration evolve

If you have questions about Trump Accounts or want help getting started, we encourage you to connect with your MRPR advisor or visit mrpr.com to learn more.

 

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