Trump Accounts: Who Can Open One, the $1,000 Contribution, and the Rules

The short answer

A Trump account is a new type of traditional individual retirement account (IRA) for a child, created by the 2025 tax law. The rules apply for tax years beginning after December 31, 2025, and contributions could not be made before July 4, 2026.

• Who can have one: a child under 18 at the end of the year the election is made, with a Social Security number.
• $1,000 from the government: only for an eligible U.S.-citizen child born in 2025 through 2028, if an adult elects it.
• Contributions: up to $5,000 a year from family, others, and employers for 2026 and 2027, with inflation adjustments after that. Contributions are not tax-deductible.
• Investments: limited to low-cost funds that track a U.S. stock index.
• Withdrawals: generally not allowed until the year the child turns 18; after that, traditional IRA rules apply.

Who can have a Trump account

An eligible child is one for whom an election is made, who has not reached age 18 by the end of the calendar year of the election, and who has a Social Security number (valid for employment) issued before the election. For an election made in 2026, the child must have been born after December 31, 2008. Only one initial account can be elected for each child. There is no U.S.-citizenship requirement to open the account — citizenship matters only for the $1,000 contribution.

The election is made on Form 4547, which can be filed on paper, submitted through an IRS Individual Online Account, or filed with an income tax return (it should not be attached to Form 1040-X). Under the IRS notice and proposed regulations, the person who may make the election is, in order of priority, the child's legal guardian, parent, adult sibling, or grandparent; when the $1,000 election is made at the same time, the person making that election opens the account. The deadline to open an account is December 31 of the year the child turns 17.

The $1,000 pilot program contribution

The $1,000 does not count toward the $5,000 annual limit, and it does not create basis — so it is taxed when eventually withdrawn. A state, territorial, or tribal child welfare agency that is a child's legal guardian may open an account for the child but cannot elect the $1,000; a foster parent who expects the child to be his or her qualifying child may make that election.

Contributions and limits

The $5,000 limit applies for 2026 and 2027 and is adjusted for inflation after 2027. Contributions can be made only until December 31 of the year the child turns 17, and a contribution made in a calendar year counts for that year — there is no option to treat an early-next-year contribution as made for the prior year. No earned income is required.

Excess contributions (2026)

Contributions for 2026 above the $5,000 limit — not counting exempt contributions such as the $1,000 pilot contribution, qualified general contributions, and rollovers — are excess contributions and may have tax consequences. Notice 2025-68 allows distributions of excess contributions from the account, even during the growth period.

Investment rules

Until the end of the year the child turns 17, the account may be invested only in mutual funds or exchange-traded funds that track an index of primarily U.S. companies (such as the S&P 500), do not use leverage, and have annual fees and expenses of no more than 0.1%. Industry- or sector-specific indexes do not qualify. If no investment is chosen, the trustee's default eligible investment is used. These details are in proposed regulations issued in August 2026.

Withdrawals and taxes

• Before the year the child turns 18: distributions are generally not allowed — no hardship withdrawals and no closing the account — except for rollovers to another Trump account, a rollover of the entire balance to the child's ABLE account in the year the child turns 17, distributions of excess contributions, and death.
• Starting January 1 of the year the child turns 18: the account follows traditional IRA rules. Earnings and amounts that are not basis are taxable when withdrawn, and a 10% additional tax may apply to early distributions unless an exception applies (for example, qualified higher education expenses or a first home purchase).
• Basis: after-tax contributions from family and others are basis and are not taxed again; the $1,000 pilot contribution, employer contributions, and general contributions are not basis.

Examples (illustrative, 2026)

Emma was born in March 2026. She is a U.S. citizen with a Social Security number. Her mother files Form 4547 to open a Trump account and elect the pilot program contribution, so the Treasury deposits $1,000 after the account is opened. In 2026 her grandparents contribute $3,000 and her parents $2,000 — $5,000, the annual limit. The $1,000 pilot contribution does not count toward that limit.

Kevin was born in 2016. His parents can open a Trump account for him in 2026 because he is under 18 and has a Social Security number, but he does not qualify for the $1,000 because he was born before 2025.

Sophia's father's employer contributes $2,500 to her Trump account in 2026 under a section 128 program. Because employer contributions count toward the $5,000 limit, the family can contribute up to $2,500 more for 2026.

Which rules are final?

Common misconceptions

• "Every child gets $1,000." Only eligible U.S.-citizen children born in 2025 through 2028, if an adult elects it.
• "Contributions are tax-deductible like a regular IRA." They are not deductible.
• "My child can use the money any time." Withdrawals are generally not allowed until the year the child turns 18.
• "Going over $5,000 just means the extra is ignored." Excess contributions may have tax consequences; the details are still subject to official IRS guidance.
• "Employer money is extra on top of the $5,000." Employer contributions count toward the $5,000 limit.
• "It is tax-free like a Roth IRA." A Trump account is a traditional IRA, not a Roth; earnings are taxed when withdrawn.