We wanted to share a quick update on a new type of tax-advantaged savings account for children, referred to as “TRUMP accounts” (Tax-Related Uplift for Middle-class Prosperity accounts), which are scheduled to launch on July 4, 2026.
Key Highlights
- What it is: A tax-deferred investment account for children under age 18, designed to function similarly to a traditional IRA once the child reaches adulthood
- $1,000 starter funding: Eligible children (generally those born between 2025–2028) may receive a one-time $1,000 government contribution
- Annual contributions: Up to $5,000 per year from all sources combined, including family and employer contributions (employer contributions may be up to $2,500 but are included in the $5,000 limit)
- Investment limitations: Funds are invested in low-cost U.S. equity index mutual funds or ETFs, with expense ratios capped at 0.1%
- No early access: Distributions are generally not permitted before age 18
- After age 18: The account transitions to standard IRA rules (taxable upon withdrawal, with potential penalties for early distributions)
Gift Tax Implications
Contributions to TRUMP accounts count toward the annual gift tax exclusion amount ($19,000 per recipient in 2026). Special gift tax rules may apply if your total gifts to any one recipient exceed the annual exclusion amount. Please consult your CPA before making contributions to a TRUMP account if you believe you may be subject to gift tax reporting requirements.
How to Open
Opening an account online is expected to be the easiest option. To enroll, complete Form 4547 through https://www.irs.gov/trumpaccounts.
Form 4547 can also be filed with your tax return (if not already filed), but the website is the primary method.
Bottom line This is essentially a government-seeded, long-term investment account for children. The primary benefit is early funding combined with tax-deferred growth, though the rules are somewhat restrictive. Contributions are not tax deductible, but earnings grow tax deferred within the account.
Additional information can be found online at: https://trumpaccounts.gov/
Please note, this is general information only and not individualized tax, legal, or investment advice. If you’d like to discuss whether a TRUMP account makes sense for your situation, please feel free to reach out to us.
