Trump Accounts are a new type of tax-advantaged investment account for children, established under recent legislation and effective for taxable years beginning after December 31, 2025. These accounts are designed to encourage long-term savings for children and feature a special $1,000 government contribution for those who qualify under a pilot program.

Key Features of Trump Accounts:

• The account is a retirement account established for the exclusive benefit of a child and designated as a Trump Account at creation.
• During the “growth period” (before the child turns 18), funds can only be invested in low-fee, broad-based U.S. equity index mutual funds or ETFs.
• Annual contributions from non-government sources are limited to $5,000 per year (indexed for inflation after 2027), with employer contributions capped at $2,500 per year and counting toward the overall limit.
• No early withdrawals are permitted during the growth period, except for certain rollovers or upon the death of the beneficiary.
• Only one Trump Account can be established per child.

Eligibility for a Trump Account:

• The child must be under age 18 at the end of the calendar year in which the account is established.
• The child must have a Social Security Number issued before the account is opened.
• The account can be established by a legal guardian, parent, adult sibling, or grandparent (in order of priority).

Eligibility for the $1,000 Government Contribution:

• The child must be born between January 1, 2025, and December 31, 2028.
• The child must be a U.S. citizen with a Social Security Number issued before the election is made.
• Only one $1,000 government contribution is allowed per eligible child.
• The individual making the election (typically a parent or guardian) must anticipate that the child will be their qualifying child for the year of the election.

How to Claim the $1,000 Government Contribution:

1. Establish a Trump Account for the child by completing IRS Form 4547 (Trump Account Election(s)). This can be done on paper or, starting mid-2026, online at trumpaccounts.gov.
2. Indicate on Form 4547 that you are also electing the $1,000 pilot program contribution for the child.
3. Submit the form electronically (recommended) or by mail to the IRS.
4. Once the election is processed, you will receive instructions to activate the account. The $1,000 contribution will be deposited as soon as practicable after the account is confirmed, but not before July 4, 2026.

Additional Notes:

• There are no income restrictions for establishing a Trump Account or receiving the $1,000 contribution.
• Contributions are not deductible, but earnings grow tax-deferred. After age 18, the account is treated as a traditional IRA for tax purposes.
• No early withdrawals are allowed during the growth period, except for certain permitted rollovers or upon death.

If you have any questions about Trump Accounts please contact the Tax Advisory Group.