In early December, the White House released new guidance on the Trump Accounts, giving families a much clearer picture of how these federally sponsored investment accounts for children will work. Originally focused only on newborns, the program has now expanded—thanks in part to a major private donation—to include older children as well.

For many parents, the biggest questions are: Who qualifies? How do you open the account? And what does this mean for your child’s long-term financial future? Below, our estate planning team breaks down the latest updates and what families should expect as the program rolls out.

What Are Trump Accounts?

Trump Accounts are federally supported investment accounts created to help every American child under 18 begin building long-term financial security. Families, employers, and even charities may make contributions, allowing children to accumulate savings and investment growth from an early age.

The program began with the One Big Beautiful Bill Act in July 2025, which provided a $1,000 seed contribution for qualifying newborns. In December 2025, philanthropists Michael and Susan Dell pledged $6.25 billion to expand eligibility so that younger children—especially those under age 10—could also receive their own accounts with a $250 initial deposit, depending on income and ZIP-code criteria.

As Treasury guidance continues to develop, here are the key details every parent should know.

How to Open a Trump Account

The IRS has confirmed that families will use Form 4547 (a new form currently in development) to open and contribute to a Trump Account.

Step 1: File IRS Form 4547

Parents will use this form to:

• • Establish a Trump Account for an eligible newborn and claim the $1,000 contribution
• • Open an account for any child under age 18
• • Make additional contributions over time
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Step 2: Follow Treasury Activation Instructions

Beginning in May 2026, the Treasury Department will send activation instructions. Parents will then verify their identity and complete the setup process online.

When Can You File?

You may open or claim a Trump Account:

• • after the program officially launches
• • With your 2025 tax return
• • Online at trumpAccounts.gov starting mid-2026 (projected June–August)
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Who Qualifies for the Free Seed Contribution?

All children under age 18 may open a Trump Account. Eligibility for federal or private seed money depends on age, citizenship, and household income.

Eligibility for the $1,000 Newborn Deposit

Your child qualifies if they:

• • Are born January 1, 2025 – December 31, 2028
• • Are U.S. citizens
• • Have a Social Security Number
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There are no income restrictions for this $1,000 benefit.

Eligibility for the $250 Contribution

The first 25 million children who meet all the following criteria may receive the $250 seed deposit funded by the Dell Gift:

• • Under age 10
• • Living in a ZIP code with median household income below $150,000
• • Identified as eligible under program data
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How Trump Accounts Work

Once opened, Trump Accounts function similarly to long-term investment accounts, with tax-deferred growth and IRA-like withdrawal rules after age 18.

Initial Contribution Amounts

• • Newborns: $1,000 federal deposit
• • Children under 10 (eligible): $250 private seed deposit
• • Children under 18 (not eligible): Accounts start at $0, but parents and employers may contribute anytime
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Annual Contribution Limits

• • Parents/Caregivers: Up to $5,000 per year
• • Employers: Up to $2,500 per year (not counted as taxable income)
• • Government agencies & charities: Additional contributions possible (pending Treasury rules)
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Tax Treatment

• • Investments grow tax-deferred
• • Withdrawals after age 18 are taxed as income
• • Early withdrawals before age 59½ incur a 10% penalty, unless an exception applies
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Allowed Penalty-Free Uses

Children (and later adults) can use Trump Account funds for:

• • Qualified higher education costs
• • First-time home purchase (up to $10,000)
• • Starting a business
• • Birth or adoption expenses
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How Trump Accounts Compare to Traditional IRAs and 529 Plans

While Trump Accounts adopt some traditional IRA rules after age 18, they are not retirement accounts. Their purpose is broader: helping children start adulthood with meaningful financial resources—even without earned income.

Compared to IRAs

• • No earned income required
• • Tax-deferred growth; withdrawals taxed later
• • Limited early access
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Compared to 529 Plans

529s remain superior for education because they:

• • Allow tax-free withdrawals for education
• • Permit up to $35,000 to be rolled into a Roth IRA
• • Offer more flexible school-related uses
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Trump Accounts should be viewed as a complement, not a replacement, for your family’s overall financial strategy.

How Much Could These Accounts Grow?

The long-term potential is substantial. Using a hypothetical 7% average annual return:

• • Max contributions ($5,000 yearly). Account could reach ~$6.95 million by age 65
• • No contributions beyond the seed money. Could still grow to ~$93,000 by age 65
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These projections aren’t guarantees but highlight the extraordinary value of early investing.

What This Means for Families

Here are the key takeaways for parents planning ahead:

1. 1. Starting Early Is More Valuable Than Contributing a Lot. Even small seed deposits can compound significantly over decades.

2. 2. You Don’t Need to Contribute the Maximum. Occasional contributions still create meaningful long-term benefits.

3. 3. This Is Long-Term Money. Funds are designed for major milestones: education, first homes, business startup costs, emergencies, and retirement.

4. 4. Market Fluctuations Are Normal These are investment accounts, so balances will rise and fall.

5. 5. This Is Not a Substitute for 529 Plans It’s another tool—not the only tool—in your family’s financial and estate planning strategy.
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Pros and Cons of Trump Accounts

⭐ Advantages

• • Free seed money ($1,000 or $250 for eligible children)
• • Tax-deferred investment growth
• • Flexible contributions from parents, employers, and charities
• • No earned income requirement
• • Helps build early financial stability
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💡 Disadvantages

• • Limited early access to funds
• • Market risk
• • Penalties for non-qualified withdrawals
• • Less advantageous than 529s for education expenses
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Key Financial Terms to Understand