What are Trump Accounts?

Trump Accounts were created under the One Big Beautiful Bill Act (passed July 3, 2025) to encourage individuals to begin saving at a young age. These accounts are structured on the Traditional IRA framework but are subject to special rules governing contributions, investments, and distributions.

How are Trump Accounts Established?

Trump Accounts will launch July 4, 2026, and unlike IRAs, cannot initially be opened through an individual’s preferred financial institution. The account must initially be set up through the U.S. Treasury Department. To make the election to establish a Trump Account, the child’s parent or guardian will either file IRS Form 4547 along with their tax return, or complete the election through the Trump Account Online Portal.

Who is eligible for a Trump Account?

Trump Accounts can be established for any child who:

has not attained age 18 before the end of the calendar year,
is a U.S. citizen, and
has a valid Social Security Number.

It is important to note that each eligible child can only have one Trump Account. This applies whether the account is opened by a parent, guardian, other authorized individual or automatically by Treasury under the federal pilot program.

Contribution Limits

Unlike Traditional and Roth IRAs, Trump Accounts do not require individuals have earned income or restrict contributions based on total income. Contributions to a Trump Account are not tax deductible and cannot exceed $5,000 per child per year (for 2026 and 2027), of which no more than $2,500 can represent contributions from employers. This annual limit does not include contributions made by the government through the pilot program or any philanthropic contribution.

The government pilot program offers a one-time contribution of $1,000 to kick start the account. To qualify for the pilot program contribution, children must meet the general eligibility requirements and be born between January 1, 2025, and December 31, 2028.

Investment Rules

Investment rules for Trump Accounts are strict, requiring the accounts be invested in an “eligible investment” during the growth period. The growth period begins the date the account is established and ends December 31^st of the year before the account beneficiary turns 18.

Eligible investments are defined as a mutual fund or exchange‑traded fund (ETF) that tracks the S&P 500 or another index composed primarily of American equities, does not use leverage and does not have annual fees and expenses of more than 1%.

Distribution Rules for Trump Accounts

Distributions from Trump Accounts are typically prohibited (unless an exception applies) until the year the child attains age 18, at which point the funds can be take subject to the same rules as Traditional IRAs with respect to the additional tax on distributions prior to attaining age 59 ½. The contributions made by individuals are not taxable when distributed, however any amount contributed through the pilot program, an employer or philanthropic donation would be taxable to the account beneficiary as ordinary income with taxation determine using the standard basis recovery rules.

Recent Regulatory Guidance

Most recently, on March 6, 2026, the IRS released two separate notices of proposed rulemaking to address Trump Accounts.

Trump Accounts Contribution Pilot Program

The proposed regulations on the $1,000 pilot program (REG-117002-25) detail the requirements for making the election to receive this contribution from the Treasury Department. These regulations reiterate that children eligible to receive the one-time $1,000 amount

Must be U.S. citizens,
With a valid Social Security number, and
Born in 2025 through 2028.

These proposed rules outline how the election to receive the contribution must be made. For example, a pilot program election must be made on the authorized IRS form (Form 4547) or through an electronic application made available through the IRS webpage. No contribution will be made unless the eligible child has established a Trump Account. And the proposal also explains that, once an election to receive the funds is made, no further election can be made on behalf of the child, presumably to prevent fraud.

Although much of the text deals with exactly how the IRS views the contribution—as a “deemed overpayment of tax” by the child and then a refund—one provision seems to stand out. This $1,000 payment can be made to the child up to the year the child turns age 17. Of course, the sooner the election is made, the better the child’s long-term savings prospects. But the rules stress that the objective is to make sure that no eligible child misses out on the opportunity to obtain the contribution.

2. Trump Accounts (Generally)

The second release (REG-117270-25) proposes regulations on the general requirements for Trump Accounts. Specifically, the proposed regulations define various terms; explain how to make an election to open the account; and clarify who can open an initial account, how to open the account, and how to designate the responsible party to manage the account. The rules do not, however, address all aspects of these new accounts. Rather, the IRS is reserving sections on contributions, distributions, reporting, and coordination with IRA rules for additional regulations in the future.

Although the pilot program ($1,000 contribution) is available to a relatively small portion of children, Trump Accounts may be established for all those with a Social Security number who have not yet reached the calendar year in which they turn age 18. Here are some of the important items in the proposed regulations that address opening a Trump Account.

Accounts are either “an initial Trump Account” or “a rollover Trump Account.”
Only one Trump Account containing funds is permitted at a time.
A Trump Account is a Traditional IRA, so the written governing documents will be similar to existing IRA documents (but will reflect different rules during the “growth period”).
Nonbank IRA trustees approved by the IRS as of December 31, 2025, are automatically approved to act as Trump Account trustees.
The definition of Trump Accounts excludes individual retirement annuitiesunder Internal Revenue Code Section 408(b).
The election to open a Trump Account can be made by either an “authorized individual” or by the Secretary of the Treasury.
An authorized individual (in order of priority) can be a legal guardian, parent, adult sibling, or grandparent.
The account must be identified as a Trump Account when opened.

The IRS is accepting comments on these proposed regulations. For the contribution pilot program regulations, comments are due by April 8, 2026; for the general Trump Account regulations, comments are due by May 8, 2026.

Conclusion

Since their inception, the IRS continues to refine the rules on Trump Accounts, however the industry still needs further guidance on contributions, distributions, account administration and investment limitations. With these provisions reserved for future guidance we can expect continued updates ahead of the program’s July 4, 2026, effective date.

Additional Resources:

Official Trump Account Website (Can sign up to receive email updates)
IRS Notice 2025-68 – Released December 2, 2025, this notice provides an overview of Trump Accounts and announces upcoming regulations regarding Trump Accounts.
IRS Form 4547 – Trump Account Elections – This form is used by a parent or guardian to establish a Trump Account for an eligible child.
Instructions for Form 4547 – Specific instructions for IRS Form 4547
REG-117270-25 – Issued March 6, 2026, these proposed regulations address the general requirements for Trump Accounts.
REG-117002-25 – Issued March 6, 2026, these proposed regulations provide additional information about the Trump Account pilot program.