Program Structure and Eligibility

Trump Accounts are a new type of individual retirement account for children under age 18, created by federal law (IRC §530A). An adult—typically a parent or legal guardian—opens the account and manages it during childhood; the account transitions to standard traditional IRA rules at age 18.

The IRS has designated Form 4547 (Trump Account Election) to set up an initial account and request the one-time $1,000 federal seed contribution for eligible children.

To receive the one‑time $1,000 pilot deposit, a child must be a U.S. citizen, have a Social Security number, be born in 2025–2028, and have had no prior pilot election made. The election must be made by an authorized individual who expects to claim the child as a qualifying dependent for that year.

The Treasury Department has also noted that it will implement safeguards to prevent duplicate accounts and that additional rules are forthcoming on legal guardians, foster care situations, and the protocol if a beneficiary passes away before age 18.

Contributions cannot be made before July 4, 2026.

Funding Mechanics and Contribution Rules

The Treasury Department will make the $1,000 federal seed deposit only after a valid election is filed for an eligible child.

Nonfederal sources may contribute up to $5,000 per year (indexed after 2027), and employers may contribute up to $2,500 per year without increasing the employee’s federal taxable income; charitable/government “qualified general contributions” may be made to classes of children. For example, the Michael & Susan Dell Foundation pledged $250 incentives for children under 10 in specific low-income areas.

Contributions begin after July 4, 2026, and the simplest path to open and claim the $1,000 is to file Form 4547 with the 2025 tax return (due April 15, 2026) or use the Treasury online portal once live.

Custody, Transfers, and Market Participation

At launch, all Trump Accounts will be custodied at the U.S. Treasury, with an expectation that they can later be transferred (rolled over) to broker‑dealers and other financial institutions after the beneficiary reaches age 18.

The Treasury has signaled that guidance on transfer timing, buffer periods, and basis tracking is forthcoming.

Investment Parameters and Account Features

During the growth period (prior to age 18), investments are limited to broad‑based index mutual funds/ETFs primarily tracking U.S. equities (e.g., S&P 500). There are open questions whether lower‑risk index options will be allowed.

Withdrawals are not allowed before January 1 of the year the child turns 18. After that point, the account follows traditional IRA rules, with additional planning opportunities (such as potential Roth conversions) becoming available.

Taxation, Reporting, and Compliance Considerations

Growth in the account is tax‑deferred, mirroring traditional IRA treatment.

However, these accounts will require unusually detailed basis tracking because they may contain a mix of federal seed dollars, employer pretax contributions, charitable/government contributions, and family after‑tax gifts—each with different tax characteristics. Federal rules for tracking and reporting basis have not yet been finalized.

Families and advisors should keep meticulous contribution records from the moment the account opens, particularly given the added complication that California may require annual taxation of earnings, creating the need for separate federal and state basis log.

Congress appears to have omitted language to treat contributions as “present‑interest” gifts (unlike 529s). Until a technical correction is enacted, personal contributions to a Trump Account may require filing a federal Gift Tax Return (Form 709) every year a contribution is made, even if the amount is below the annual gift tax exclusion amount.

For more information, please contact your William Blair wealth advisor or visit trumpaccounts.gov

Disclosure

As of 3/19/2026

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