Trump Accounts Explained: What They Are, How They Work, and How to Claim One

The short answer

A Trump Account is a type of traditional IRA set up for a child under 18 with a Social Security number. The child owns it, a parent or guardian manages it, and Treasury has automatically enrolled over 60 million eligible children, though a parent or guardian still has to claim the account in the official Trump Accounts app to manage it. Children who are U.S. citizens born from 2025 through 2028 can also receive a one-time $1,000 from Treasury, but you must elect it using Form 4547.

Up to $5,000 a year can go in from family and employers (employers up to $2,500), invested only in low-cost U.S. stock index funds with fees capped at 0.1%. The money is generally locked until the calendar year the child turns 18, and then traditional IRA tax rules apply.

Hey everyone,

"Trump Accounts" have gone from a line in a tax law to something tens of millions of families may have waiting for them. Treasury says it has automatically enrolled more than 60 million children, and the IRS updated its guidance on the accounts this week. But many parents are still unsure what the accounts are, whether their child has one, and what they're supposed to do next.

This guide covers what a Trump Account is, why it exists, who qualifies, how to claim one, how the money can be invested and withdrawn, and how it compares with other ways to save for a child. The rules come from the IRS instructions for Form 4547, the IRS's Trump Accounts page (updated October 21, 2026), Treasury's announcements, and the statute itself, all linked at the end. This is a general explanation, not tax advice, and the program is still new, so check the official pages before acting.

What is a Trump Account?

According to the IRS, a Trump Account is a type of traditional individual retirement account (IRA) set up for the exclusive benefit of a child. The child is the owner, called the account beneficiary, and a parent or guardian manages it while the child is a minor. The law that created the accounts is section 530A of the Internal Revenue Code, enacted on July 4, 2025. The IRS says the accounts were created by the Working Families Tax Cuts, the name it uses for that law.

During what the IRS calls the "growth period," which starts when the account is opened and ends on December 31 of the year before the child turns 18, special rules apply: the money can only go into approved investments, there's a separate contribution limit, contributions aren't tax-deductible, and withdrawals are mostly blocked. After that, the account generally follows the normal rules for traditional IRAs.

Opening one is free. Treasury's launch announcement says plainly, "There is no cost to open an account."

What is the purpose of Trump Accounts?

The goal is to get every child invested in the stock market early and let time do the work. When Treasury launched the app on July 4, 2026, Secretary Scott Bessent said the accounts give "every child a stake in the American Dream from day one." The design supports that in a few ways:

• A government seed deposit. Children born from 2025 through 2028 can receive a one-time $1,000 contribution from Treasury (the "pilot program"), so there's something in the account from the start.
• Many sources of money. Parents, relatives, friends, employers, charities, and governments can all contribute, which is meant to make it easy for a child to build a balance over time.
• Simple, low-cost investing. Funds are limited to broad U.S. stock index funds with annual fees capped at 0.1%, which keeps costs low and choices simple.
• Long time horizon. Because money is locked until the child's 18th-birthday year, it has about 17 years to compound. We explain why that's powerful in our post on compound interest.

Who is eligible for a Trump Account?

A child can have an account if they have a valid Social Security number and won't turn 18 before the end of the calendar year in which the account is established. For an account opened in 2026, that means the child must have been born after December 31, 2008. The child's Social Security number must have been issued before the election is made.

The $1,000 Treasury contribution has stricter rules. According to the IRS, the child must be:

• a U.S. citizen with a valid Social Security number,
• born on or after January 1, 2025 and on or before December 31, 2028,
• expected to be the qualifying child of the adult electing the deposit for that tax year, and
• someone who hasn't already had a $1,000 election processed.

A child doesn't need to qualify for the $1,000 to have an account.

How do you open or claim a Trump Account?

This is the part that changed recently. Originally, parents opened accounts by filing IRS Form 4547. Then, on October 1, 2026, Treasury announced that it had completed automatic enrollment: "over 60 million more eligible children now have an account ready to be claimed," in Bessent's words, on top of millions who had already signed up themselves. If your child is under 18 with a Social Security number, an account may already exist for them. It still has to be claimed.

1. Get the official app or website. Go to TrumpAccounts.gov, which links to the official Trump Accounts app on the Apple App Store and Google Play. Start from the official site or app, not from a link in a message.
2. Claim the account. The IRS says "even if an account was opened automatically, you must claim it before you can manage it." In the app, you verify your identity and your relationship to the child, review the child's information, and accept the account terms. Claiming is what lets you manage the account and lets relatives, friends, and employers contribute.
3. Elect the $1,000, if your child qualifies. The IRS is explicit: "you must elect the $1,000 contribution for your child, even if Treasury automatically opened the account." You do that by submitting Form 4547 through the app, the Trump Accounts website, or your IRS Individual Online Account, and selecting the $1,000 pilot option. The IRS says Form 4547 isn't required just to claim an account, only for the $1,000 election.
4. Choose investments and set up contributions. Once claimed, you can pick from the eligible investments and, if you like, set up recurring contributions from a linked bank account.

Have the parent's identifying details and the child's legal name, Social Security number, and date of birth ready. The IRS warns that this information has to match Social Security Administration records to avoid delays. Who can act depends on the situation: when someone is only opening an account, the IRS's order of priority is legal guardian, then parent, then adult sibling, then grandparent. For the $1,000 election, the person must expect to claim the child as a qualifying child.

One note on timing: Treasury's October 1 release says the child's account must be claimed to receive the $1,000, while the IRS says you must also elect it. In practice, the app walks you through both, so follow its prompts and check TrumpAccounts.gov if anything is unclear. The IRS says Treasury will make the deposit as soon as practicable after the election and confirmation the account is open, and no deposit was allowed before July 4, 2026.

Beware of scams. Treasury says it and its providers will never ask for passwords, one-time verification codes, or other credentials by email, text, or phone. To verify a message or get help, call 1-866-USA-4547 or go to TrumpAccounts.gov, and don't use phone numbers you find through an internet search.

Where does the money come from, and how much can go in?

The IRS describes five kinds of contributions during the growth period:

• The $1,000 Treasury pilot contribution for eligible children.
• Qualified general contributions from states, the federal government, tribal governments, or 501(c)(3) charities for a defined group of children.
• Employer contributions, up to $2,500 a year per child, excluded from the employee's taxable income.
• Rollovers of the full balance from a prior Trump Account to a new one.
• Everyone else: parents, grandparents, friends, even the child.

The $5,000 annual cap applies to employer contributions plus contributions from other sources. The Treasury $1,000, qualified general contributions, and rollovers don't count toward it. The cap is adjusted for inflation after 2027, and no contributions were allowed before July 4, 2026. Contributions aren't tax-deductible, and the child doesn't need to have earned income for money to go in, unlike with a regular IRA.

Employers are starting to participate. Treasury said at launch that more than 50 companies had committed to contribute for employees' children. Philanthropy is also in the picture: Michael and Susan Dell pledged $6.25 billion to give $250 to each of 25 million qualifying children, and SpaceX president Gwynne Shotwell announced a stock gift to children's accounts in July. In our post on Anthropic's and Elon Musk's share pledges, we noted that Musk hasn't said whether his planned gift would go through these accounts.

What can the money be invested in?

During the growth period, a Trump Account can only hold "eligible investments." Under the statute and IRS guidance, those are mutual funds or ETFs that track a qualified index of primarily U.S. companies, such as the S&P 500, don't use leverage, and charge annual fees and expenses of no more than 0.1%. Industry or sector-specific indexes are excluded.

That keeps things simple and cheap, but it also means the account is invested entirely in U.S. stocks, with no bonds or international funds. Stocks rise and fall, so the balance will be volatile and isn't guaranteed. The parent or guardian, called the responsible party, picks among the eligible options, and the IRS says they can also transfer the full balance to another approved trustee through a rollover.

When can the money be withdrawn, and how is it taxed?

Not early. Under the statute, there are generally no withdrawals until the first day of the calendar year in which the child turns 18. The only exceptions during the growth period are rolling the full balance into another Trump Account, rolling it into an ABLE account at age 17, returning excess contributions, and distributions on the child's death. There is no hardship withdrawal for emergencies.

After the growth period, most traditional IRA rules apply. In practical terms:

• Growth is tax-deferred. You don't pay tax on gains as the account grows.
• Withdrawals are taxed. Contributions from the Treasury, employers, and charities have no tax basis, so they're taxed as ordinary income when withdrawn, along with the earnings. Money contributed by parents and others is after-tax and creates basis, so only the earnings on it are taxed.
• Early withdrawals can cost extra. The IRS says the 10% additional tax on early IRA distributions can apply unless an exception fits, with higher education expenses and first-home purchases given as examples.

This is different from a Roth account, where qualified withdrawals can be tax-free. The statute says a Trump Account can't be designated a Roth IRA.

What could a Trump Account grow to?

Here's an illustration. The chart assumes a steady 8% annual return, a child who receives the $1,000 seed at the start, and about 17 years of growth (a child born in 2026 reaches the end of the growth period in 2043).

Illustrative balance after 17 years at 8% a year

Two takeaways. The $1,000 seed alone doesn't grow into much, about $3,900 in this illustration, so the real power comes from steady additions over time. And because the first years of compounding matter most, starting early makes a difference.

How does a Trump Account compare with other ways to save for a child?

General comparison of common child savings accounts

Account	Contributions	Tax treatment	Access
Trump Account	Up to $5,000 a year, plus the $1,000 seed; no earned income needed	Not deductible; growth tax-deferred; taxed on withdrawal	Locked until the year the child turns 18
529 plan	Anyone; limits set by each state plan	Growth tax-free if used for qualified education	Flexible, but non-education use is taxed and penalized
Custodial Roth IRA	Child needs earned income	After-tax in; qualified withdrawals tax-free	Retirement account with limited early access
Custodial brokerage (UTMA/UGMA)	No annual cap	Taxable each year; kiddie tax rules	Child takes control at the age of majority

These aren't mutually exclusive. If your child has a job, a custodial Roth IRA can be a strong complement (see our post on Roth IRAs for kids), and a 529 is built for education costs. Details vary by state and by account provider, so check the specifics before choosing.

What should you watch out for?

• Scams. The program's size makes it a target. Use only TrumpAccounts.gov and the official app, and never share codes or passwords.
• The money is locked. Don't put in money you might need before the child's 18th-birthday year.
• Market risk. An all-stock index account can fall, especially near the end of the growth period.
• Taxes come later. It's tax-deferred, not tax-free.
• The rules are still developing. The program is new, and the IRS and Treasury are still issuing guidance. Check IRS.gov and TrumpAccounts.gov for updates before relying on a detail.

Key takeaways

• A Trump Account is a special kind of traditional IRA for a child, with a free $1,000 seed for eligible kids born 2025 through 2028.
• Your child may already have one. Treasury auto-enrolled millions of children, but you must claim the account in the official app to manage it.
• The $1,000 requires an election. Submit Form 4547 through the app, website, or IRS account.
• Up to $5,000 a year can go in, invested only in low-cost U.S. stock index funds and locked until the child's 18th-birthday year.
• Time is the advantage. Small steady contributions over 17 years can add up, but returns aren't guaranteed.

More soon,
Learn to Love Money

Sources

• IRS: Trump Accounts (page updated Oct 21, 2026)
• IRS: Instructions for Form 4547, Trump Account Election(s) (Rev. December 2025)
• U.S. Treasury: Announces the completion of automatic enrollment for Trump Accounts (Oct 1, 2026)
• U.S. Treasury: Official launch of Trump Accounts and the app (July 4, 2026)
• U.S. Treasury: Launch of the Trump Accounts app and next steps (May 28, 2026)
• Cornell Legal Information Institute: 26 U.S.C. 530A, Trump accounts
• Fortune: Shotwell and Dell gifts to Trump Accounts (July 9, 2026)