By Charles Hardy | Last updated: Nov 06, 2026
Key Takeaways
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A tax-advantaged investment account created for eligible children under age 18 to help build long-term savings.
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Government contribution: Eligible children born between January 1, 2025, and December 31, 2028, may receive a one-time $1,000 federal contribution.
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Contribution sources: Parents, relatives, employers, and qualifying organizations can contribute, subject to applicable rules
and limits.
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Investment growth: Contributions are invested in eligible mutual funds or ETFs that track indexes of primarily U.S. companies.
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Tax reporting: Trump Accounts involve three important tax forms: Form 5498-TA for contribution reporting, Form 1099-R for applicable distributions, and Form W-2 for qualifying employer contributions.
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Withdrawal rules: Special restrictions apply during the account’s growth period. Traditional IRA rules generally apply after the growth period ends.
What Is a Trump Account?
A Trump Account is a tax-advantaged investment account created under the One Big Beautiful Bill Act (OBBBA) for eligible children under age 18. It lets parents, family members, employers, and other eligible contributors invest on a child’s behalf in eligible U.S. stock index funds. The account is owned by the child and managed by an authorized adult until the child reaches adulthood, helping build long-term savings through investment growth.
How Do Trump Accounts Work?
Trump Accounts allow eligible children to build savings through contributions from different sources. The contributed money is invested in eligible funds, and the account grows over time through investment earnings.
Here’s how the process works:
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Account Ownership and Management
A Trump Account is established in the child’s name, and the child is the account beneficiary and owner. A parent, guardian, or other authorized individual manages the account on the child’s behalf during the growth period.
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Contributions
Money can be contributed by parents, relatives, employers, the federal government, and other eligible organizations. Each contribution must follow the applicable IRS rules and annual limits.
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Investment of Funds
Contributions are invested in eligible mutual funds or exchange-traded funds (ETFs) that track broad U.S. equity indexes. These investments allow the account to participate in the growth of the U.S. stock market.
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Tax-Deferred Growth
Investment earnings generally accumulate tax-deferred during the account’s growth period. This means earnings are not generally taxed each year while they remain in the account.
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Access to Funds
Withdrawals are generally restricted during the growth period, subject to limited exceptions. After the growth period ends, the account becomes subject to applicable traditional IRA rules.
The Trump Account growth period generally ends on December 31 of the year before the beneficiary turns 18.
Who Is Eligible for a Trump Account?
A child can qualify for a Trump Account if they meet the following requirements:
- Have a valid Social Security number (SSN).
- Will not turn 18 before the end of the calendar year in which the account is established.
Eligibility for the $1,000 government contribution
Not every child with a Trump Account qualifies for the $1,000 federal contribution. To receive this one-time contribution, the child must:
- Be a U.S. citizen.
- Be born between January 1, 2025, and December 31, 2028.
- Have a valid Social Security number.
An authorized individual must also elect to receive the $1,000 pilot program contribution for the child. Having an automatically established Trump Account does not automatically qualify the child to receive this contribution.
How Can You Contribute to a Trump Account?
Trump Accounts can receive contributions from several sources, including the federal government, parents, family members, employers, and qualifying organizations. Each contribution type is subject to specific eligibility requirements and IRS rules.
Federal Government Contributions
The federal government provides a one-time $1,000 pilot program contribution to eligible children’s Trump Accounts. To qualify, a child must:
- Be a U.S. citizen.
- Be born between January 1, 2025, and December 31, 2028.
- Have a valid Social Security number (SSN).
An authorized individual must elect to receive this contribution by submitting Form 4547 or using an available Trump Accounts
application process.
Parent and Family Contributions
Parents, grandparents, relatives, and other individuals can contribute to a child’s Trump Account. These contributions count toward the $5,000 annual contribution limit, which is adjusted for inflation.
Employer Contributions
Employers can contribute to Trump Accounts belonging to their employees or their employees’ dependents under Section 128 of the Internal Revenue Code.
- Employers can contribute up to $2,500 per employee annually for 2026 and 2027 under the employer
contribution exclusion.
- Qualifying contributions are excluded from the employee’s gross income.
- Employer contributions count toward the general $5,000 annual Trump Account contribution limit.
Trump Account Contribution Limits
Trump Accounts have a general annual contribution limit of $5,000 per child for 2026 and 2027. This limit applies to contributions from individuals and employers and will be adjusted for inflation after 2027.
The following contributions count toward the $5,000 annual limit:
- Contributions from parents, relatives, and other individuals.
- Employer contributions, including qualifying Section 128 contributions.
Contributions that do not count toward the limit include:
- The one-time $1,000 federal pilot program contribution.
- Qualified general contributions made through the Treasury by governments or eligible nonprofit organizations.
- Qualified rollover contributions from another Trump Account.
Separate Limit for Employer Contributions
Employers can contribute up to $2,500 per employee in 2026 and 2027 under Section 128. This limit applies to the employee across all their employers, not separately to each child. Qualifying contributions within this limit are excluded from the employee’s gross income. Employer contributions also count toward the child’s $5,000 annual Trump
Account limit.
Trump Accounts vs. Other Savings and Retirement Accounts
Trump Accounts share some features with traditional IRAs and other savings accounts, but they have different eligibility rules, contribution limits, investment requirements, and withdrawal restrictions.
The following table highlights the key differences:
| Account Type |
Main Purpose |
Contribution Rules |
Tax Treatment |
Withdrawal Rules |
| Trump Account |
Build long-term savings for children |
Generally up to $5,000 annually during the growth period, subject to specific exclusions |
Tax-deferred investment growth; withdrawals may be taxable |
Generally restricted during the growth period; traditional IRA rules apply afterward |
| 529 Plan |
Save for education expenses |
No federal annual contribution limit, but plan and gift-tax rules may apply |
Tax-deferred growth; qualified education withdrawals are generally tax-free |
Tax-free for qualified education expenses; nonqualified withdrawals may be taxable and subject to an additional tax |
| Custodial Roth IRA |
Save for a child’s retirement |
Requires the child to have earned income; subject to annual IRA limits |
Contributions are made with after-tax money; qualified withdrawals are tax-free |
Subject to Roth IRA distribution rules |
| Custodial Traditional IRA |
Save for a child’s retirement |
Requires the child to have taxable compensation; subject to annual IRA limits |
Contributions may be deductible; withdrawals are generally taxable |
Subject to traditional IRA distribution rules |
| UGMA/UTMA Custodial Account |
Hold and manage assets for a child |
No annual IRS contribution limit |
Investment earnings may be subject to taxes |
Funds must be used for the child’s benefit; control transfers to the child at the applicable age |
Frequently Asked Questions
A child can qualify if they have a valid Social Security number and will not turn 18 before the end of the calendar year in which the account is established. Eligibility for the account does not automatically qualify the child for the $1,000 government contribution.
An authorized individual, typically a parent, makes the election on Form 4547. File it with your federal tax return or use the online process available through TrumpAccounts.gov. Form 4547 can’t be attached to an amended return or an extension request.
Yes. Parents, grandparents, relatives, and other individuals can contribute to a child’s Trump Account. These contributions generally count toward the $5,000 annual contribution limit for 2026 and 2027.
Generally, no. Withdrawals are restricted during the growth period, except for certain permitted transactions, such as distributions of excess contributions, qualified ABLE rollovers, and distributions following the beneficiary’s death.
No. Individual contributions to a child’s Trump Account are not tax-deductible. However, qualifying employer contributions under Section 128 may be excluded from the employee’s gross income, subject to the applicable limit.
No. A child does not need earned income to receive contributions to a Trump Account. This differs from traditional and Roth IRAs, which generally require the account holder to have eligible compensation to contribute.
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