A new kind of retirement account for children
A Trump Account is a tax-advantaged savings account for a person under 18, created by the 2025 reconciliation law (Public Law 119-21), which the IRS refers to as the Working Families Tax Cuts law. The statute, new section 530A of the Internal Revenue Code, treats the account as an individual retirement account that is not a Roth IRA, with extra rules that apply until the year the child turns 18. [3] The IRS describes it as a new type of IRA for children. [1]
Two separate federal ideas sit under the same name, and much of the confusion around the program comes from mixing them. The first is the account itself, which can receive money from families, employers, governments and charities. The second is a one-time $1,000 payment from the Treasury, created by a different provision (section 6434) and available only to some children. [3][4] Having an account does not by itself mean a child receives the $1,000.
This article describes the program as of October 14, 2026. It separates what the statute says from what temporary regulations, a pending and IRS guidance add, because those layers differ in how settled they are. It describes how the program works and does not assess whether any family should open or fund an account.
How the law, rules and guidance fit together
The statute is the base layer. It sets the $5,000 annual limit, the investment restrictions, the bar on early withdrawals and the $1,000 pilot payment. [3][4] Agency rules fill in how it operates.
IRS Notice 2025-68, issued in early December 2025, was initial guidance and announced that regulations would follow. It covered employer contributions, post-18 treatment and a draft Form 4547 for elections. [7][8] A followed on March 9, 2026, according to the Federal Register. [6]
On September 30, 2026, Treasury and the IRS published two documents. One is a set of temporary regulations (T.D. 10056, 91 FR 61705), effective September 30, 2026, applying to tax years beginning on or after January 1, 2026, and set to expire September 30, 2029. They authorize the Treasury Secretary to open accounts automatically. [5] The other is a proposed rule (91 FR 61812) that withdraws the March 9 proposal and reproposes its subject matter with the automatic-account structure. Comments and any request for a public hearing are due November 30, 2026, and the document says taxpayers may not rely on the proposal. [6] Temporary regulations have legal force now; proposed rules do not, and final regulations have not been issued.
Operational guidance sits beside all of this. The IRS instructions for Form 4547 and the TrumpAccounts.gov site explain how to elect, claim and fund an account in practice. [2][9]
Who gets the $1,000, and how the election works
Section 6434 treats an eligible child as having made a $1,000 payment against income tax, and the Treasury pays that amount into the child's Trump account. An eligible child is a qualifying child who was born after December 31, 2024 and before January 1, 2029, who is a U.S. citizen, and for whom no one has previously made the election. Only one election can be made per child, and the election must include the child's Social Security number. [4] The IRS and the Form 4547 instructions describe the same group as children born in 2025 through 2028 who are citizens with a valid Social Security number. [1][2]
The mechanism is an election on IRS Form 4547. A person who expects the child to be their qualifying child for the election year files it, and the instructions say it can be filed at any time, including with an income tax return. [2] The IRS page says a parent or guardian can sign in through an ID.me-verified IRS account to submit it, and describes the process as taking 5 to 10 minutes. [1] A separate election to open only an account, without the $1,000, can be made by a legal guardian, parent, adult sibling or grandparent, in that priority order, if the child is under 18 at the end of the election year and has a valid Social Security number. [2]
The $1,000 does not count toward the $5,000 annual contribution limit. [3] The pilot payment was not to be deposited before July 4, 2026, the first date contributions were allowed. [2] Fortune reported in October that some families who signed up early were still waiting for the promised deposit. [10]
Eligibility for the $1,000 turns on birth year and citizenship, so a child born in 2024 or earlier can have an account but not the pilot payment. [11] Whether that payment arrives automatically with an account is the point reporting treats differently. TrumpAccounts.gov invites visitors to get $1,000 for every American child born from January 1, 2025 through December 31, 2028, without mentioning an election. [9] Moneywise reported that Treasury cannot request the payment itself and that an adult must elect it, while Fortune reported that the account must be claimed first to receive it. [10][11] The statute requires an election. [4]
Automatic accounts: what began on or about October 1, 2026
Until this fall, accounts came into existence only when someone elected one. The temporary regulations changed that. They say that on or about October 1, 2026, the Secretary will make an election to establish an account for each eligible individual who meets the age and Social Security number requirements and for whom no one other than the Secretary has made an election. Later elections will be made periodically for newly eligible children. [5] The statute allows an election by the Secretary or by another person, but not both for the same individual. [3]
Treasury's reasoning, set out in the Federal Register, was participation. The document says about 5.6 million electronic Forms 4547 had been processed before July 30, 2026, against roughly 73.37 million eligible children. It estimated that an opt-in design would reach about half of eligible families, pointing to Maine's Alfond Grant program, where opt-in enrollment was about 40%. [5] Treasury Secretary Scott Bessent later put sign-ups at 7 million to 8 million children, about 1 in 10, according to Moneywise. [11]
On October 1, Treasury announced that it had finished automatically enrolling eligible children, creating accounts for more than 60 million who did not already have one. Including families who signed up on their own, the White House reported nearly 70 million accounts, according to Fortune on October 12. [10] Those are administration figures reported by the press; the Federal Register gave only an advance estimate of more than 60 million. [5]
An automatic account is limited. During the growth period, which runs until the year before the child turns 18, it may accept only qualified general contributions (described below) and, in limited cases, the $1,000 pilot payment. Its only investment is an interest in a master group trust that Treasury established for the exclusive benefit of automatic-account holders. [5] A parent, legal custodian or the beneficiary can claim an account by proving identity and legal authority, after which the balance moves to a claimed account that can receive family and employer contributions. Until it is claimed, it cannot accept money from parents, grandparents or an employer. [11] The regulations contain no stated deadline for claiming, and Fortune did not report one. [10]
Who can contribute, and how much
The statute caps contributions, other than certain exempt ones, at $5,000 per calendar year per child, counting contributions made before the year the child turns 18. The cap is indexed for inflation for taxable years after 2027 and rounded down to a multiple of $100. Exempt contributions are rollovers of an entire balance between Trump accounts, qualified general contributions and the $1,000 pilot payment. [3] No deduction is allowed for contributions. [3]
Parents, relatives and friends can contribute within the $5,000 limit. Employers may contribute up to $2,500 per year to an employee's account or a dependent's account under section 128. The IRS release says that amount counts against the $5,000 limit, and the contribution is not taxable income to the employee. [7] The EY summary of Notice 2025-68 adds that the $2,500 limit applies per employee rather than per child, and that an employer can offer payroll contributions through a section 125 cafeteria plan only for a dependent's account. [8] The Form 4547 instructions state that employer contributions combined with other sources, excluding pilot, qualified general and rollover amounts, are capped at $5,000. [2]
Governments and charities can give at scale through qualified general contributions. A general funding contribution may come from a governmental entity (other than a U.S. possession), an Indian tribal government or a section 501(c)(3) charity. It must be made in an equal amount to every beneficiary in a defined class, and a class defined by geography must contain at least 5,000 beneficiaries. [3][5] The temporary regulations also permit qualified stock contributions of publicly traded domestic stock, which generally cannot be sold before the earlier of five years after the contribution or the end of the growth period. [5] Fortune reported that since the July 4 launch more than $4.5 billion had been deposited across all sources, including $1.3 billion of government seed money, over $600 million from family and friends and $2.6 billion from philanthropy, and that Michael and Susan Dell pledged $6.25 billion to deposit $250 for eligible children age 10 and under in ZIP codes with median household incomes below $150,000. [10]
What the money can be invested in
Until the year the child turns 18, the statute allows the account to hold only an eligible investment: a mutual fund or that tracks a qualified index, uses no leverage and has annual fees and expenses no higher than 0.1% of the fund balance. A qualified index is the S&P 500 or another index of primarily U.S. equities with regulated futures trading, and excludes industry- or sector-specific indexes. [3] Treasury and the IRS summarized this as funds tracking the S&P 500 or a similar index of primarily American equities. [7]
Automatic accounts add a layer. Each child has a separate account with its own records, but the assets are pooled in the master group trust, and the says the trust is intended to satisfy a long-standing IRS ruling on group trusts (Rev. Rul. 81-100). [5][6] When a trust receives donated stock, its trustee must sell it within a reasonable time after the holding period ends and reinvest the proceeds in eligible investments, which the regulations treat as prompt if done within 30 calendar days. [5]
On April 6, 2026, Robinhood announced that Treasury had selected BNY as financial agent for Trump Accounts and that Robinhood had been tapped as brokerage and initial trustee, building the program's standalone web and app experience. [12][13] The temporary regulations say the initial accounts are held by a trustee selected by the Secretary, and that nonbank trustees already approved for IRAs as of December 31, 2025 are automatically approved for Trump accounts. [5] A family can move a child's balance to a different eligible trustee only by a direct transfer of the entire balance, and only one funded Trump account can exist per person. [13] Partial transfers do not qualify. [3]
When money can come out
The statute says that, subject to exceptions, no distribution is allowed before January 1 of the year the beneficiary turns 18. [3] As a hypothetical example, a child born in 2025 turns 18 in 2043, so withdrawals would first be allowed on January 1, 2043. The exceptions are narrow: a rollover of the whole balance to another Trump account, a qualified ABLE rollover (a direct transfer of the full balance to an ABLE account in the year the child turns 17), a return of excess contributions and a distribution after the beneficiary's death. [3][8] If the beneficiary dies before the year of the 18th birthday, the account stops being a Trump account and the taxable part is included in the income of the recipient or the beneficiary's estate. [3]
After that point the account is generally treated as a traditional IRA and is subject to the same rules as other traditional IRAs, according to the IRS release. [7] The Notice 2025-68 summary says trustees may convert accounts to traditional IRAs automatically at the end of the growth period. [8] TrumpAccounts.gov says the child controls the account at 18 and can keep it invested or withdraw money for uses such as education or a home, with the tax treatment of a traditional IRA. [9] Moneywise reported that money taken out before age 59½ is generally subject to income tax on the taxable portion plus a 10% additional tax, with exceptions that include qualified education expenses and up to $10,000 toward a first home. [11] Fortune likewise noted that early withdrawals may face penalties unless used for qualifying expenses. [10]
Tax treatment
Contributions are not deductible, so most money going in has already been taxed. [3] Because the account is treated as an IRA, investment earnings are generally not taxed until withdrawal. [3]
Not all money in the account is treated the same way when it comes out. The EY summary of Notice 2025-68 explains that contributions from parents and other individuals create basis and are not taxed again when withdrawn, while employer contributions, the $1,000 pilot payment and charitable or government gifts create no basis and are taxable when withdrawn, as are earnings. Withdrawals are allocated proportionally between basis and total value. [8] The statute provides that, for the basis calculation, qualified general contributions, pilot payments and amounts excluded under section 128 are not counted as investment in the contract. [3] Contributions to a Trump account before the child's 18th-birthday year also do not count against the limits that apply to the child's other IRAs. [3]
Employer money has a distinct tax profile: the employee is not taxed when an employer contributes within the section 128 limit, and the amount is reported on Form W-2 in Box 12 with code TA, according to EY's description of the draft form. [7][8]
What is still unsettled
Several points remain open as of October 14, 2026. The first is the legal footing: the automatic-account structure rests on temporary regulations that expire September 30, 2029 and a with comments open until November 30, 2026. [5][6]
The second is the timing of the $1,000 election. Moneywise reported that the deadline is December 31 of the year the child turns 17, under rules proposed in March 2026. [11] That March proposal has since been withdrawn and reproposed, and the documents reviewed for this article do not state a current deadline. [6] The statute leaves the time and manner of the election to the Secretary. [4]
The third concerns unclaimed accounts. The proposed rule asks for comment on a disclaimer procedure for automatic accounts that no one claims, and on how ABLE rollovers should work for them. [6] The Commonwealth research group estimated, according to Moneywise, that about 20% of eligible babies could miss the $1,000, leaving roughly $2.88 billion unclaimed. [11]
The fourth is who benefits. Stanford economists Neale Mahoney and Adam Shaw argued in Time in December 2025, and a New School analysis of 529 data reached a similar view, that benefits would flow mainly to families able to contribute thousands of dollars a year. The White House responded that about 80% of accounts are linked to families earning under $200,000, according to Fortune. [10] Treasury's own historical-return projections, which Moneywise summarized, show wide ranges and rest on past stock returns that do not guarantee future results. [11] Fortune also noted a financial adviser's caution that a single-stock gift can concentrate a child's portfolio. [10]
Finally, the sources here do not describe the governance of the master trust, its fees beyond the statutory 0.1% ceiling for eligible investments, or any deadline to claim an account. This article does not establish any individual child's eligibility.
Sources
- IRS, Trump Accounts (page last updated July 7, 2026)Official sourceBack to text: ↑1↑2↑3
- IRS, Instructions for Form 4547, Trump Account Election(s) (revised December 2025; page updated April 30, 2026)Official sourceBack to text: ↑1↑2↑3↑4↑5↑6
- 26 U.S.C. § 530A, Trump accounts (added by Public Law 119-21)SourceBack to text: ↑1↑2↑3↑4↑5↑6↑7↑8↑9↑10↑11↑12↑13↑14↑15↑16↑17
- 26 U.S.C. § 6434, Pilot program for Trump accountsSourceBack to text: ↑1↑2↑3↑4↑5
- Federal Register, Trump Accounts, T.D. 10056 temporary regulations, 91 FR 61705 (September 30, 2026)Official sourceBack to text: ↑1↑2↑3↑4↑5↑6↑7↑8↑9↑10↑11
- Federal Register, Trump Accounts, proposed rule, 91 FR 61812 (September 30, 2026)Official sourceBack to text: ↑1↑2↑3↑4↑5↑6
- IRS news release IR-2025-117, Treasury, IRS issue guidance on Trump Accounts; notice announces upcoming regulations (December 2, 2025)Official sourceBack to text: ↑1↑2↑3↑4↑5
- EY Tax News, IRS releases first set of guidance on Trump accounts (Notice 2025-68; December 5, 2025)SourceBack to text: ↑1↑2↑3↑4↑5↑6
- TrumpAccounts.gov, official program site (accessed October 14, 2026)Official sourceBack to text: ↑1↑2↑3
- Fortune, Nearly 70 million kids now have a Trump Account, but parents have to claim it first (October 12, 2026)SourceBack to text: ↑1↑2↑3↑4↑5↑6↑7↑8
- Moneywise via Yahoo Finance, Treasury auto-opened 60M+ Trump Accounts after sign-ups stalled under 8% (October 4, 2026)SourceBack to text: ↑1↑2↑3↑4↑5↑6↑7↑8
- Robinhood newsroom, Robinhood tapped as brokerage for Trump Accounts together with BNY (April 6, 2026)SourceBack to text: ↑
- Current Federal Tax Developments, Treasury announces initial trustee for Trump Accounts (April 7, 2026)SourceBack to text: ↑1↑2