One big thing – What to know about Trump Accounts

In July of 2025, Congress passed the mammoth One Big, Beautiful Bill (OBBB), clocking in at over 800 pages. Like most significant tax-law changes, it is not “real” for Americans until they go to file their taxes.

As was promised on the campaign trail, Republicans extended new tax breaks for overtime, tipped, and senior taxpayers. However, these provisions are income limited and exempt only for a certain amount of wages, so not all filers and not all income will qualify for these exemptions. Nevertheless, these temporary provisions, in place for tax years 2025–2028, are expected to contribute to larger returns for some filers.

Another, perhaps lesser-known provision, is also beginning to gain attention – the creation of new Trump, or 530A, accounts. The Republican party has said they created these accounts to get children investing in the U.S. economy and to give them a head start on savings for adulthood.

As the U.S. Treasury works to implement these accounts for a launch date in July 2026, the White House is trying to get the word out about them and their potential to jump-start savings.

President Trump even mentioned them in his State of the Union address in February, signaling that they may become a component of Republicans’ economic messaging for the 2026 midterms.

While not all details about these accounts are available yet, there are some facts that can help parents begin to understand whether these may be suitable for their family’s savings goals.

Who is eligible for a Trump account and seed funding?

Children under the age of 18 who are U.S. citizens with a Social Security number are eligible for an account. Parents can file form 4547 to open an account on behalf of their child or use an online portal that is slated to launch in July 2026.

These accounts operate like a custodial account with the child as the owner and beneficiary of the account and with the parent acting on the child’s behalf until they reach 18 years of age.

Children born between 2025 and 2028 are eligible for a one-time $1,000 seed deposit by the U.S. government. Other children under the age of 18 are not eligible for this seed donation at this time.

After the accounts were established, several philanthropists offered additional funding. Michael and Susan Dell pledged an additional $250 of seed funding, per child, residing in zip codes where median incomes fall below $150,000. Ray and Barbara Dalio pledged $75 million to donate $250 to the accounts of over 300,000 children in Connecticut. Brad Gerstner made a similar pledge in Indiana, and cryptocurrency exchange Kraken, has made a pledge to children in Wyoming.  The Trump administration has launched what they call a ’50-state challenge’ to draw philanthropists to pledge donations to children across the U.S.

Who can contribute to these accounts and what are the contribution limits?

Aggregate contributions from employers, parents, and family cannot exceed $5,000 per child, per year. Of this cap, employers can contribute up to $2,500 per employee (not per child). This is generally not considered income for the employee. These contributions can be made to accounts until the child turns 18.

Charities 501(c)(3) organizations and local and state governments may also contribute to these accounts, and contributions generally do not count toward the $5,000 cap.

When can withdrawals be made?

Withdrawals are NOT permitted until a child reaches the age of 18. At that time, withdrawals are treated like those from a traditional IRA and are subject to the now-adult child’s income tax rate and a 10% penalty if withdrawn before the age of 59½. Though, as with ordinary IRAs, there are exceptions to the 10% penalty for certain amounts for some specified expenses (e.g., higher education or first-time home purchases).

What is the tax treatment of contributions and earnings when withdrawn?

It depends on how the funds are contributed. There are several ways to fund Trump Accounts, and the method of funding determines future taxable status.

Parents and family may elect to contribute to an account on an after-tax basis, and, in this case, the contributions, NOT the account earnings, can be withdrawn tax free. Earnings will be subject to ordinary income tax rates.

Some employers may elect to offer a pretax payroll deduction for account contributions through their cafeteria plan. In this case, the adult child would face taxes on earnings AND contributions when withdrawn.

Finally, any contributions made from a charitable institution and earnings would be taxable upon withdrawal.

How will the account be invested?

At this time, only certain investments are eligible for Trump account funds. The OBBB Act provided that these accounts must be invested broadly in U.S. equities via index funds (mutual funds or ETFs*) that track the overall market. Eligible funds must not charge over .10% in annual fees.

What should parents of children under 18 do next?

Parents should consider whether opening a Trump account is right for their child’s savings goals vs. other available accounts, such as custodial Roth IRAs and 529 plans. Some of the items a parent should consider include:

• The tax treatment of initial contributions, growth, and withdrawals of different accounts available.
• Whether their child is eligible for the $1,000 in U.S. government seed money or any other philanthropic contributions.
• Whether their employer will match contributions to their child’s Trump account.

If a parent chooses to open a Trump account, they may wish to evaluate rolling the funds over from the initial trustee to another eligible financial institution of their choice through a trustee-to-trustee rollover. This can only be done once the account is opened through the U.S .Treasury. More details are expected on the rollover process as this program is implemented.
 

In other news:

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• Tariff uncertainty remains after the Supreme Court decision to overturn tariffs put in place under the authority of the International Economic Emergency Powers Act. The White House announced a reimplementation of tariffs under section 122 of the trade act at a worldwide rate of 15%. Section 122 only allows tariffs to remain in place for 150 days before Congressional reauthorization is required, and they are now facing a legal challenge by over 20 U.S. states. The Administration has suggested that it will use other authorities to create a substantially similar tariff regime. There are still questions about whether, under this new system, tariffs will be as high as before the ruling, if refunds are due and to whom and if negotiated deals with trading partners will remain durable.
• It’s election time, already. The primary process for the 2026 midterm elections kicked off on March 3 in several states, including Arkansas, North Carolina, and Texas. North Carolina and Texas may be home to races that determine control of the U.S. Senate in November with competitive races expected, though the outlook for the Texas race remains unclear until Republicans complete their runoff between incumbent Senator John Cornyn and challenger Texas state Attorney General Ken Paxton.
• Department of Homeland Security (DHS) is shutdown, and the way out of it is not clear.  After the longest government shutdown in history last fall, Republicans and Democrats managed to fund all departments excepting DHS. The dispute over funding flared after two deaths in Minnesota where the Immigration and Customs Enforcement (ICE) agency had increased operations. At the heart of the disagreement are disputes over whether ICE agents can be made to remove masks and what types of warrants they may use to make arrests. Both sides appear to be locked in on opposite sides of this issue. But pressure to fund the department may mount as the Transportation Security Agency goes unfunded, which could lead to longer lies at airports in the days and weeks ahead.