A New Tax-Advantaged Account for Children - and How to Open One Before July 4
A new federal program is giving families with young children a head start on long-term wealth building - and the window to get in before the July 4, 2026 contribution launch is open right now.
Trump Accounts are tax-advantaged investment accounts for children, created under the One Big Beautiful Bill Act signed in 2025. The federal government is seeding eligible accounts with a one-time $1,000 contribution from the U.S. Treasury - and families can begin adding their own money starting July 4, 2026.
Here is everything you need to know.
What Is a Trump Account?
Think of a Trump Account as a traditional IRA designed specifically for children. The account is established in the child's name and grows tax-deferred throughout childhood. During the growth period - from account opening until December 31 of the year before the child turns 18 - the account operates under special rules distinct from standard IRAs.
After the growth period ends, standard traditional IRA rules apply, including required minimum distributions and early withdrawal penalties, with exceptions for higher education expenses and first-home purchases.
Who Is Eligible?
To open a Trump Account
Any child who meets all three of the following:
• Is under age 18 at the end of the calendar year in which the account is opened (for 2026, born after December 31, 2008)
• Has a valid Social Security number issued before the election is filed
• Has not previously had a Trump Account opened on their behalf
For the $1,000 government contribution
Additional eligibility requirements apply:
• Child must have been born between January 1, 2025 and December 31, 2028
• Child must be a U.S. citizen
• Child must be the qualifying dependent of the authorized individual filing the election
• No prior pilot program contribution election has been filed for the child
How to Open an Account
Opening a Trump Account requires filing IRS Form 4547, titled "Trump Account Election(s)." There are two ways to do this:
• With your 2025 federal tax return (recommended): This is the fastest path. Most major tax software platforms already include Form 4547 as part of the 2025 filing process. File it electronically with your return for the quickest processing.
• Through the online portal: If you have already filed your 2025 return, you can complete the election at trumpaccounts.gov once the portal launches later in 2026. Paper filings are also accepted but not recommended given current IRS processing times.
After filing, the U.S. Treasury will send account activation instructions beginning in May 2026. An authentication process is required to complete the account setup.
Contribution Rules
No contributions of any kind - including the $1,000 government deposit - can be made before July 4, 2026. After that date, the following limits apply:
• Annual family contribution limit: $5,000 per year (inflation-adjusted after 2027)
• Employer contributions: Up to $2,500 per year through a Section 125 cafeteria plan, excluded from the employee's taxable income
• Government and charitable contributions: Qualified contributions from government entities and 501(c)(3) organizations do not count against the $5,000 annual limit
How the Money Can Be Invested
During the growth period, Trump Accounts can only be invested in "eligible investments" - generally mutual funds and ETFs that track an index of primarily U.S. companies. This keeps the investment approach straightforward and long-term focused.
Why Act Before July 4?
Filing Form 4547 now accomplishes two things:
• Your child's account will be established and ready the moment contributions open on July 4, rather than waiting on processing delays after that date.
• If your child was born between 2025 and 2028, filing ensures they receive the $1,000 Treasury seed contribution as soon as it is deposited - no delay, no lost compounding.
A $1,000 investment growing tax-deferred from birth to age 18 at a hypothetical 7% average annual return becomes approximately $3,380 before the child makes a single contribution of their own. That is the power of starting early.
Questions We Are Hearing
What if I already filed my 2025 return?
You can still open an account through the trumpaccounts.gov. If you filed an extension, you may still be able to include Form 4547 with your return.
Does this count toward my IRA limit?
No. Trump Account contributions have a separate annual limit from traditional and Roth IRAs.
What happens to the account when my child turns 18?
The growth period ends, and standard traditional IRA rules take over. The account remains tax-deferred, and distributions are taxed as ordinary income - with early withdrawal penalties unless an exception applies.
Next Steps
If you have a child under 18 - especially one born in 2025 or later - this is worth a conversation before July 4. We are happy to walk through eligibility, the filing process, and how a Trump Account fits into your family’s financial plan.
Reach us at support@delongbrower.com or (616) 394-0500.