Trump Accounts: Should you open one for your child? Considerations for parents
Editorial staff, J.P. Morgan Wealth Management
- Trump Accounts are expected to be available to open starting July 4, 2026.
- Any child under 18 who is a U.S. citizen with a Social Security number may be eligible for a Trump Account.
- Children born between January 1, 2025, and December 31, 2028, can receive a $1,000 government deposit to their Trump Account.
- Up to 25 million children age 10 or younger who live in qualifying ZIP codes may receive a $250 charitable gift deposit to their Trump Account from the Michael & Susan Dell Foundation. These children must have been born before January 1, 2025, and are therefore ineligible for the $1,000 government deposit.
- Account funds are invested according to government guidelines and are generally locked up until the child turns 18.
Saving for your child’s future can feel overwhelming, but a new federal program aims to make things a little easier. Under a provision of the One Big Beautiful Bill Act (OBBBA), every child under 18 who is a U.S. citizen with a Social Security number may be eligible for a Trump Account – an investment account designed to help families build wealth for the next generation.
Depending on your child’s birth date, age and where they live, their Trump Account may start with a $1,000 government deposit, a charitable deposit or no deposit. For children who are eligible for an account – regardless of initial deposit – family members and even employers can contribute each year, up to annual limits, while the child is under 18.
Trump Accounts are expected to be available starting July 4, 2026. Here’s what you need to know about how the accounts work, who’s eligible for them and how they compare to other ways to save and invest for your child.
What are Trump Accounts?
Trump Accounts are a new type of tax-advantaged investment account for children created under the OBBBA. The U.S. government will fund $1,000 deposits for eligible children (born between January 1, 2025, and December 31, 2028), while a $6.25 billion gift from the Michael & Susan Dell Foundation will fund $250 charitable deposits for qualifying children in certain ZIP codes. Not all children will be eligible for the federal or charitable funds, but families of children under 18 can contribute to these accounts regardless of whether an initial deposit is made.
Trump Accounts, which will be able to grow tax-deferred, will feature an annual contribution limit of up to $5,000 total, per child – not counting the deposits mentioned above or other charitable or governmental deposits – from family and employers until the child is 18 and assumes ownership.
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Who is eligible for a Trump Account and the federal or charitable seed deposits?
Trump Accounts are available to any child under 18 who is a U.S. citizen with a Social Security number. However, the type of initial seed deposit your child may receive – if any – depends on their birth date, their age and where they live:
- A $1,000 federal seed deposit will be available for children born between January 1, 2025, and December 31, 2028.
- A $250 Dell charitable deposit will be available for up to 25 million children age 10 or younger (but born before January 1, 2025) living in ZIP codes with median incomes below $150,000.
- Other eligibility-based charitable deposits may also be available, with criteria, amounts and timing determined by each program. Dalio Philanthropies pledged to provide $250 deposits for eligible children in Connecticut. It’s possible that more organizations may sign on for similar charitable gifts in the future.
How to open and fund a Trump Account
Trump Accounts are expected to be available to open starting July 4, 2026. You can open a Trump Account by filing IRS Form 4547 or, beginning in mid-2026, through the online portal at trumpaccounts.gov. According to the IRS, for calendar year 2026, Form 4547 once released may be used at any time, including when filing your 2025 income tax return. That said, since both Form 4547 and the online application are expected to launch in mid-2026, families filing early may need to wait until these options are available to complete the election. The election must be made before January 1 of the year in which your child turns 18.
All Trump Accounts will first be created and held with the U.S. Treasury Department’s designated financial agent. Later, you will be able to transfer the full balance to your preferred brokerage firm through a trustee-to-trustee rollover.
If your child qualifies, the Treasury Department will deposit the $1,000 contribution no earlier than July 4, 2026, and as soon as practicable after the election is made and the Treasury can confirm with the initial Trump Account trustee that the account has been opened. Other qualified general contributions, such as the Dell Foundation gift, are expected to be made by the Treasury on a quarterly basis, based on the members of the qualified class as of the beginning of the quarter.
How Trump Accounts work
Trump Accounts are meant to provide a head start for savings and are intended to grow over time through investment in only low-cost index funds, like mutual funds or exchange-traded funds (ETFs). The idea is that the account can grow with the market over the course of your child’s life. Like all investments, the account’s value may go up or down depending on market performance.
Parents and guardians will be allowed to add money to the account, up to a yearly contribution limit of $5,000. Employers – of both young employees with their own Trump Accounts and employees who have dependents with Trump Accounts – can contribute up to $2,500 per year to the account as well, though this also counts toward the $5,000 yearly cap. Importantly, an employer’s contribution is not considered income to either the employee or the dependent.
All the money in the account grows tax-free while it’s in the account. The funds cannot be accessed until your child turns 18, at which point they will have control of the account. However, the funds in the account are still subject to withdrawal rules similar to those governing individual retirement accounts (IRAs): Withdrawals are taxed as ordinary income, and withdrawals made before age 59 ½ – other than for specific expenses such as college tuition or a first home – are subject to a 10% penalty.
Tax treatment
Contributions from family members and employers are made with after-tax dollars. After the child turns 18 and the account essentially becomes a traditional IRA, only the account owner can make additional contributions (and only if the owner has earned income, subject to IRA rules).
Tax treatment of Trump Account contributions
Federal government contribution | Qualified general contributions | Employer contributions | Other contributions | Qualified rollover contributions |
|---|---|---|---|---|
Contribution type details | ||||
$1,000 deposit for eligible children | Gifts can be made to a group of people in any amount by a state or Washington, D.C., the U.S., a tribal government or a section 501(c)(3) tax-exempt organization, and will be distributed equally to all members of the group | Up to $2,500 annually per employee, not per beneficiary (indexed for inflation beginning in 2028) | Anyone else, e.g., beneficiary, parents, grandparents; up to $5,000 total per beneficiary annually (indexed for inflation beginning in 2028) | From one Trump Account to another Trump Account for the same beneficiary; rollover must be for the entire account, partial rollovers not allowed; not subject to the $5,000 annual limit |
Taxable income | ||||
Not taxable income to parents or beneficiaries | Not taxable income to beneficiary | Not taxable income to employee or beneficiaries | Contributions are made with after-tax dollars and are not taxable to the beneficiary | Not taxable income to anyone (i.e., the account beneficiary – or, in the case of employer contributions, the employee) |
Basis | ||||
Contribution does not create basis in the account | Contribution does not create basis in the account | Contribution does not create basis in the account | Contributions create basis in the account; growth is still taxable on withdrawal | Basis in the original account rolls over to the new account, but the rollover does not create any additional basis in the new account |
Investment restrictions
During the growth period, funds must be invested in broad U.S. equity index funds – such as mutual funds or ETFs that track market indexes like the S&P 500 – with no leverage and annual fees capped at 0.1%. No sector-specific funds, cash or money market investments are allowed during the growth period (before age 18).
Rollover and transfer options
After age 18, the account owner may be able to roll over the Trump Account to another eligible retirement account, such as a traditional IRA or Roth IRA, subject to IRS rules and potential tax implications.
How Trump Accounts compare to other saving and investing options for your child
Adam Frank, Head of Wealth Planning and Advice at J.P. Morgan Wealth Management, suggests that parents and guardians start by deciding what their savings goals are as they consider the account type that’s best for their child’s needs.
“For those focused on college expenses, 529 plans may be advantageous due to their tax-free withdrawals and flexibility in covering various educational expenses,” Frank says.
Qualified 529 expenses have been further expanded under the OBBBA, and since a Trump Account is in your child’s name, it may count against your child for financial aid purposes, unlike a 529 plan.
“Conversely, [Trump Accounts] can satisfy broader financial goals, such as a down payment [on a home] or career training, and provide a $1,000 head start for eligible children born from January 1, 2025, to December 31, 2028,” Frank says.
However, echoing earlier points, Frank also emphasizes the following limitations:
- Restricted investment choices (must be broad U.S. equity index funds, no leverage and fees capped at 0.1%).
- A $5,000 annual contribution cap (with inflation adjustments after 2027; the government seed, Dell charitable gift and certain other charitable and government contributions do not count toward this cap).,
- Contributions from parents and guardians, employers and others who are ultimately eligible can be made only until the account beneficiary turns 18.
- The money can’t be used before your child turns 18.
- The account is in your child’s control as of their 18th birthday and is then treated like an IRA.
Frank advises parents and guardians to weigh these factors against their family’s priorities and tax situation to make informed decisions.
Comparing Trump Accounts, 529 plans and custodial accounts
Trump Account | 529 plan | Custodial account |
|---|---|---|
Who can open | ||
Parent, guardian or authorized individual | Parent, guardian or other adult | Parent, guardian or other adult |
Initial deposit | ||
$1,000 federal seed for babies born between 2025 and 2028; $250 Dell Foundation charitable gift for eligible children 10 or younger born prior to 2025; no minimum required for additional deposits | Varies by state; often $0 or parent-chosen amount; no minimum required | Varies; often $0 or parent-chosen amount; no minimum required |
Who can contribute | ||
Parents, family, employers, charities, government | Anyone | Anyone |
Annual contribution limit | ||
$5,000 (excludes government seed, Dell Foundation charitable gift and other qualified contributions) | No annual limit; most states limit total contributions | No legal limit |
Tax benefits | ||
Grows tax-deferred; taxed as ordinary income on withdrawal; potentially subject to penalties (expect complexities around tracking pre-tax/post-tax contributions and the implications); employer contributions not deemed income to employee | Grows tax-deferred; withdrawals tax-free if used for education, otherwise taxed as ordinary income plus a 10% penalty | Generally taxed at parents’ rate until child turns 19 and at child’s rate after age 19 (or as late as age 24 if full-time student) |
Who controls | ||
Authorized individual (generally parent or guardian) until beneficiary reaches 18, at which time the beneficiary controls the account subject to IRA withdrawal rules | Account owner | Custodian until child reaches adulthood, generally age 18 or 21 but up to 25 or 30 in some states |
When funds can be used | ||
After age 18 for approved uses; nonapproved uses subject to IRA withdrawal rules | Anytime for qualified educational expenses; nonqualified expenses subject to 10% penalty | Anytime for any reason |
Penalty for early withdrawal | ||
Yes, if used for unapproved expenses | Yes, if used for nonqualified educational expenses | No |
Given these similarities and differences, it’s important to consider your family’s unique needs and next steps.
If you’re a parent, should you open a Trump Account for your child?
J.P. Morgan Wealth Management’s Frank recommends families carefully consider their financial goals, tax situation and the unique features of Trump Accounts when deciding whether and how to use these accounts for their children’s future.
“For eligible families, once the accounts are available, there doesn’t seem to be a financial downside to getting the $1,000 government funding, even if no other money is added to the account,” Frank says. “And if your child is eligible for a contribution from the Dell Foundation gift, the Dalio Philanthropies gift or other charitable gifts, there wouldn’t be a downside to opening the account to take advantage of those gifts.”
“These accounts allow an employer of the parent to make contributions of up to $2,500 of the $5,000 annual funding maximum without that money being considered compensation to the parent, so it might be worth parents and guardians making a $2,500 contribution if their employer would match [and that’s their requirement for contributing]. But the limit on investment options, combined with the child becoming the owner at age 18, could lead many parents and guardians to limit their contributions to these accounts.”
Frank also notes, “Qualified dividends and long-term capital gains in these accounts are taxable at ordinary income rates when withdrawn, versus UTMA accounts, where qualified dividends and long-term gains are taxed at favorable rates. By revisiting their strategy every few years, parents and guardians can adapt to any changes in congressional benefits or tax treatment to any of the account types available to them to save for their children.”
Because Trump Accounts are new, it’s not yet clear how they may affect state tax benefits, college financial aid eligibility or other government programs. Families should consult a tax or financial professional to understand how a Trump Account may impact their specific situation.
The bottom line
Trump Accounts are designed to help families start investing in their children’s future right from the beginning. With a $1,000 head start from the federal government for eligible children, a possible $250 boost from the Dell Foundation and potentially other charitable organizations, and the chance to grow funds over time, these accounts could be a useful tool for some families.
As J.P. Morgan Wealth Management’s Frank puts it: “Parents and guardians should assess their comfort level with the child gaining full control of the funds at age 18,” even though the accounts will be subject to IRA withdrawal rules. “This aspect requires careful consideration, as it involves predicting whether their newborn child will be ready to manage what could be a five- or six-figure sum of money in their teen years.”
It's for these reasons that it may be important to discuss your investment strategy for your children with financial advisors, including tax professionals, to make the most informed decision.
Frequently asked questions about Trump Accounts
Trump Accounts are expected to be available for families to open starting July 4, 2026. Parents and guardians will be able to open a Trump Account using IRS Form 4547 or the online portal at trumpaccounts.gov.
Children born between January 1, 2025, and December 31, 2028, are eligible for the $1,000 government deposit into a Trump Account.
Up to 25 million children age 10 or younger (but born before January 1, 2025) living in ZIP codes with median incomes below $150,000 are eligible for the $250 Dell Foundation charitable deposit.
Children who do not qualify for the $1,000 government deposit (for example, those born before 2025) may still receive the $250 deposit if they meet the age and ZIP code requirements.
Some children may be eligible for other additional charitable seed deposits. For example, Dalio Philanthropies in December 2025 pledged to provide $250 deposits for eligible children in Connecticut. Other charitable contributions may also be announced.
Employers can contribute up to $2,500 per employee per year to a Trump Account, including through cafeteria plans for dependents. Those contributions will not be considered income to the employee or the dependent.
Money in a Trump Account must be invested in government-approved, broad U.S. equity index funds – such as mutual funds or ETFs that track indexes like the S&P 500 – with no leverage and annual fees capped at 0.1%.
No withdrawals are allowed from a Trump Account before age 18, except for specific rollovers or upon death.
When a child turns 18, the child takes control of the Trump Account, which is then treated like a traditional IRA, with standard rules for contributions and withdrawals.
After age 18, the account owner may be able to roll over the Trump Account to another eligible retirement account, such as a traditional IRA or Roth IRA, subject to IRS rules and potential tax implications.
No, there is no earned income requirement for contributions to Trump Accounts.
No, the contribution limits for IRAs and Trump Accounts are applied separately.
Unlike 529 plans, Trump Accounts are not limited to education expenses. Once your child turns 18, the account is subject to the rules applicable to IRAs, and money can be used for certain approved purposes without penalty, including paying for education or buying a first home. If your child doesn’t use the funds right away, they can leave the money in the account to continue growing. Note that once your child turns 18, they control the account and, subject to IRA withdrawal rules, are free to use the money for any purpose, subject to tax and penalties.
Like any investment vehicle, there are potential drawbacks to consider. Families may have limited control over the investment options available to them compared to custodial accounts. And while the money grows tax-deferred, withdrawals are taxed as ordinary income when the money is withdrawn, and nonqualified withdrawals are subject to an additional penalty. There will also be pre-tax and post-tax contribution nuances to keep track of that may make these accounts challenging.
Giving an 18-year-old direct ownership of what could be a five- or six-figure account could be a deterrent to using Trump Accounts rather than other savings vehicles – and it’s nearly impossible for parents and guardians of a newborn or young child to know what that child will be like in their teenage years.
More broadly, some financial specialists have also raised concerns that wealthier families may benefit more from the program, since they’re more likely to contribute the full $5,000 each year. And because the program is new, there’s still uncertainty around how the accounts will operate and how they may affect college financial aid or other government benefits.
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Editorial staff, J.P. Morgan Wealth Management
