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Trump Accounts Explained (2026): How the Kids' Savings Account Works
Everything parents need to know: who qualifies, the $1,000 seed, how much you can add, how the money is invested, and what happens at 18.
What is a Trump Account?
A Trump Account is a tax-advantaged investment account for children under 18, created by the 2025 tax law. It works like a traditional IRA opened in a child's name. Money goes into low-cost US stock index funds and grows tax-deferred, and the child can access it from age 18. Children born from 2025 through 2028 get a one-time $1,000 deposit from the federal government. Contributions opened on July 4, 2026.
Key facts
| Rule | Trump Account |
|---|---|
| Who can have one | Any child under 18 at the end of the year it's opened, with a valid Social Security number |
| Free money | $1,000 federal seed for US citizens born 2025–2028; a $250 Dell gift for many children 10 and under born before 2025 |
| Yearly limit | $5,000 from family, friends and employers combined; rises with inflation after 2027 |
| Employer money | Up to $2,500 a year per employee, tax-free to the employee |
| Investments | US stock index mutual funds or ETFs with total fees of 0.1% or less, until the year the child turns 18 |
| Access | No withdrawals before the year the child turns 18 |
| Tax | Grows tax-deferred; growth, the seed and employer money are taxed as income when withdrawn |
| How to open | IRS Form 4547, with your tax return or online at trumpaccounts.gov |
Who qualifies
A legal guardian, parent, adult sibling or grandparent can open an account for any child who will be under 18 at the end of the year and has a valid Social Security number. The $1,000 seed has extra conditions: the child must be a US citizen born after December 31, 2024 and before January 1, 2029, and the person filing should expect to claim the child as a qualifying child. Check your child's eligibility.
How to open a Trump Account
- Make sure your child has a Social Security number.
- File IRS Form 4547. You can attach it to your federal tax return or file online at trumpaccounts.gov.
- Tick the pilot contribution box if your child was born from 2025 through 2028, to request the $1,000.
- Follow the Treasury's activation instructions. The Treasury chose Robinhood as the initial trustee that holds the accounts.
How much can you contribute?
Anyone can contribute, up to $5,000 a year in total per child, until the year the child turns 18. Employer contributions of up to $2,500 count toward that cap. Deposits from the government and charities, such as the $1,000 seed and the Dell $250, don't. Contributions from family aren't tax-deductible, but they come back tax-free when withdrawn. See how much it could grow.
How the money is invested
Until the year the child turns 18, the account can only hold mutual funds or ETFs that track a broad index of mainly US stocks, such as the S&P 500. They can't use leverage, and total yearly fees must be 0.1% or less. Funds that track ESG indexes are excluded under proposed rules. If you don't choose, the trustee picks a default eligible fund.
What happens at 18
From the year the child turns 18, the account follows traditional IRA rules. The child can withdraw, or leave the money invested for retirement. Family contributions come back tax-free; growth, the seed and employer money are taxed as ordinary income. Withdrawals of taxable money before age 59½ usually carry a 10% penalty, except for cases such as higher education costs or up to $10,000 toward a first home.
Pros and cons
- $1,000 free for children born 2025–2028
- Employers can add up to $2,500 a year tax-free
- Very low fees by law
- Money can be used for anything after 18, or left to grow for retirement
- Growth is taxed as income when withdrawn, unlike 529 money spent on college
- No state tax deduction for contributions
- Only US stock index funds during childhood
- The child, not the parent, controls the money from 18
Trump Account vs 529 plan
A 529 plan is usually better for your own college savings, because qualified withdrawals are completely tax-free and many states give a tax deduction. A Trump Account is better for collecting free money and for savings that may not be spent on education. Many families use both. Compare them with your numbers.
Questions parents ask
Is a Trump Account worth it?
For children born 2025–2028 it's almost always worth opening, because the $1,000 seed is free money. Whether to add your own savings depends on your goals; for college, a 529 often keeps more after tax.
Can I open a Trump Account for a child born before 2025?
Yes, as long as the child is under 18 at the end of the year and has a Social Security number. They don't get the $1,000 seed, but may get the Dell $250 if aged 10 or under.
Who controls the money?
The person who opens it manages the account until the child turns 18. After that, the child owns and controls it.
Can grandparents contribute?
Yes. Anyone can contribute, as long as the total from all family, friends and employers stays within $5,000 a year.
Last checked November 11, 2026 against IRS Form 4547 instructions, IRS Notice 2025-68 and the August 2026 proposed investment regulations.