Understanding the New Trump Accounts
Trump Accounts are a tax-advantaged way to save for a child’s future, with children born between 2025 and 2028 also receiving $1,000 from this new federal savings program.
Introduced under the One Big Beautiful Bill Act in 2025, “Trump Accounts” are a new federal savings program designed to give children an early financial head start through long-term, tax-advantaged investing.
Any U.S. citizen child under the age of 18 may have a Trump Account opened, allowing parents, grandparents and employers to contribute on the child’s behalf. Children born between 2025 and 2028 receive a one-time $1,000 federal seed contribution, while older children may still open accounts but without the government seed money.
Trump Accounts have been established as “Internal Revenue Code §530A accounts,” structured similarly to an individual retirement account (IRA) for a minor. Accounts are invested in a low-cost U.S. stock index fund, with fees capped at 0.10%, and are intended to remain invested through childhood to benefit from long-term compounding. Total annual contributions from all sources are capped at $5,000 per child.
In addition to family and employer funding, certain private and philanthropic organizations have announced plans to make supplemental contributions for eligible children, particularly those in lower-income areas, which may result in some accounts receiving additional funding.
Current guidance indicates that parents or guardians will be able to file IRS Form 4547 to elect and establish a Trump Account, which can be done alongside the 2025 Tax Return or through a newly established online portal, www.trumpaccounts.gov. Filling out IRS Form 4547 is also how eligible children will receive the $1,000 seed amount, expected to be available after July 5, 2026. Broader account activation and Treasury-led outreach are expected to begin around May 2026.
Contributions to Trump Accounts are made with after-tax dollars and can grow in a tax-deferred manner. Once the child reaches adulthood, the account is treated as a traditional IRA under IRS rules, allowing standard IRA rollovers and Roth conversions, subject to normal taxation and requirements.
Another important consideration is that contributions to Trump Accounts may trigger Form 709 gifttax reporting. Since the program does not currently offer a special gifttax exclusion, donors may need to report any amount contributed. As the program is new, additional clarification from Treasury is expected over time.
Planning considerations
- Employer contributions count toward the $5,000 annual cap
- Funding may trigger Form 709 gift-tax reporting
- Funds generally cannot be accessed before age 18, except in limited cases (such as ABLE account eligibility)
- Program rules may evolve as Treasury releases additional guidance
- From an estate planning perspective, because these accounts are for the exclusive benefit of the child, contributions remove assets from the parents’ or grandparents’ taxable estate.
Consider the potential for Roth conversions during the child’s college years, when they may have low or no earned income. This may create an opportunity where a child can convert funds to a Roth IRA up to the standard deduction ($16,100 for 2026), at little to no tax cost. Above that standard deduction amount, a child may fill up their 12% tax bracket ($12,401 to $50,500 in 2026), to convert additional amounts into the Roth IRA at a low tax cost.
Comparing education savings strategies
The new Trump Account offers another effective way to save for qualified expenses, including education expenses. Use the following table to compare its features with existing education saving plans, to help determine which account type(s) may best suit your child’s needs for education savings. You may also wish to contact a Corient Wealth Advisor to help you assess the various accounts in context of your family’s unique financial circumstances and tax situation.
| Account Type | Trump Account (§530A) | 529 Plan | Coverdell Education Savings Account | UGMA/UTMAUniform Gifts to Minors Act or Uniform Transfer to Minors Act (UGMA/UTMA) |
|---|---|---|---|---|
| Description | Federally created tax-advantaged savings account for minors, structured as a §530A account and treated similarly to a minor IRA | State-sponsored tax-advantaged education savings plan | Tax-advantaged education savings account for qualified education expenses | Custodial account for a minor where assets transfer to the child at age of majority |
| Contribution Limits (2025) | $5,000 annually per child from all sources (family + employer); $1,000 federal seed for children born 2025–2028 | Lifetime limits vary by state (often $235k–$550k) | $2,000 annually per child | No contribution limit |
| Income Limits for Contributions | None | None | AGI limits apply | None |
| Tax Advantages | After-tax contributions; tax-deferred growth; treated as a traditional IRA at adulthood | Tax-deferred growth; tax-free withdrawals for qualified education | Tax-deferred growth; tax-free withdrawals for education | No tax deferral; earnings taxed annually (Kiddie Tax rules may apply) |
| Usage of Funds | Converts to a traditional IRAatadulthood; standard IRA rules apply.The account can also be used for afirst timehome purchase and starting a business | Qualified education expenses (college, K-12, student loans in some states) | Qualified K-12 and higher education expenses | Any use for the benefit of the child |
| Access / Control | Generallyno access before age 18 (limited exceptions); account converts at adulthood | Account owner controls withdrawals | Custodian controls until beneficiary reachesage ofmajority | Custodian controls until age of majority (18–21) |
| Impact on Financial Aid | Likely treated as retirement asset after conversion; guidanceisevolving | Minimal impact if parent-owned | Minimal impact if parent-owned | Considered student asset; higher FAFSA impact |
| Investment Options | Limited to low-cost U.S. stock index fund; fees capped at 0.10% | Limited by plan menu | Broad investment flexibility | Broad investment flexibility |
| Other Notable Info | Employer contributions allowed; auto-enrollment not yetfinalized; Form 4547 election currently expected | Five-year front-loading allowed | Fundsgenerally mustbe used by age 30 | Child gains full control atage ofmajority |
Sources: https://www.fidelity.com/learning-center/smart-money/how-much-to-save-for-college; https://www.irs.gov/pub/irs-drop/n-25-68.pdf
ABOUT THE AUTHOR
Blake McDaniel
Blake is a Wealth Planner in our Atlanta, GA office. He began his career in military intelligence and drone operations with the 7th Special Forces Group before transitioning to finance. Since then, he has worked with multiple RIAs serving high‑net‑worth individuals.
Blake has an academic background in business analytics, finance, and intelligence analysis, and is currently completing his Master’s in Finance with a concentration in Financial Planning, which will fulfill the educational requirements for the Certified Financial Planner™ designation.
Outside of work, Blake enjoys staying active and spending time outdoors. He is a member of the Atlanta Run Club and the Exiles Rugby Club, and he volunteers with a local animal shelter, supporting dogs in need.
Amanda Valenti
Amanda is a Wealth Advisor in our Atlanta, GA office. She started her career at UBS, where she learned the complete financial planning process on a team that led with financial planning. Prior to joining legacy firm Brightworth, Amanda worked at Oxford Financial Group and Lenox Wealth Advisors, where she prepared comprehensive financial plans in a leadership capacity. Amanda is a CERTIFIED FINANCIAL PLANNER® practitioner and received a Bachelor of Science in Finance and a Bachelor of Science in Accounting from the University of Illinois Chicago. She also completed a Financial Planning certification program at Northwestern University. Originally from Chicago, Amanda and her husband, George, live with their two children and two German Shepherds in Fayetteville, GA. Amanda enjoys travel, photography, reading and staying active.
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5311777 – March 2026
