By Laura Hanlon, CPA
Background
A new type of retirement savings vehicle under IRC Sec. 530A, commonly known as “Trump accounts” for eligible children was created under the 2025 Act. Trump accounts can be thought of as individual retirement accounts (IRAs) with training wheels: IRA-type accounts subject to a specific statutory and administrative framework designed to promote long-term savings. During the account’s growth period, special rules under IRC Sec. 530A apply. Once the growth period ends, most of those special rules no longer apply, and the account is subject to the general provisions of IRC Sec. 408 governing traditional IRAs.
The IRS issued Notice 2025-68 on 12/2/25, providing initial guidance on the operational mechanics of Trump accounts. On 3/9/26, the IRS published proposed regulations providing general requirements and election rules for opening Trump accounts and specific rules for the Trump account contribution pilot program. These proposed regulations will apply beginning on or after 1/1/26; the IRS intends to publish final regulations by early 2027. Future proposed regulations are expected to address Trump account contributions, investments, distributions, reporting, and coordination with IRA rules.
Contributions may be made beginning on 7/4/26, exactly one year after passage of the 2025 Act. But opening an account isn’t automatic; elections must be made to both open an account and receive the $1,000 pilot program contribution.
Opening a Trump Account
Only eligible individuals may be Trump account beneficiaries. An eligible individual is an individual who hasn’t attained age 18 before the close of the calendar year in which the election to open an initial Trump account is made, has a valid social security number issued before the election date, and for whom an election to establish a Trump account is made.
To prevent multiple Trump accounts from being opened for the same eligible individual, once a valid election has been made, the IRS won’t process additional elections for that child. The election must be made on or before December 31 of the calendar year in which the eligible individual turns age 17.
Only an authorized individual may elect to establish a Trump account. If the only election is to establish an initial Trump account, authorized individuals are, in order of priority, a legal guardian, parent, adult sibling, or grandparent. If more than one person qualifies and no prior election has been made, any authorized individual may make the election. By doing so, the individual represents, under penalties of perjury, that they are authorized and that no higher-priority person is available.
If the election is made to both open an initial Trump account and request the $1,000 pilot program contribution, the authorized individual is the pilot program-electing individual: the person who anticipates that the child will be their qualifying child under IRC Sec. 152(c) for the tax year in which the election is made. If it’s later determined that the child isn’t that individual’s qualifying child, the election will still be effective if the child meets the other pilot program requirements.
An authorized individual makes the election by filing Form 4547, Trump Account Election(s), or by submitting the online Trump account election. Form 4547 can be e-filed at the same time the authorized individual e-files their tax return, although the election is independent of the tax return and isn’t filed as part of it. If the election isn’t e-filed with the return, it can be made at any time using the online election form or by filing a paper Form 4547. Form 4547 shouldn’t be filed with Form 1040-X.
Once the election is processed, the Treasury Department will send information to the authorized individual, who will then complete an authentication process to activate the Trump account. On 4/6/26, Treasury designated Bank of New York Mellon Corporation as a financial agent to support implementation. BNY has partnered with Robinhood, which will serve as brokerage and initial trustee.
Growth Period
During the growth period, Trump accounts are governed by the special rules of IRC Sec. 530A. The growth period begins when the initial Trump account is established and ends on December 31 of the calendar year in which the beneficiary attains age 17.
Because the beneficiary doesn’t have legal capacity to manage the account when first established, a responsible party will be appointed, normally the individual who made the election. Unless state law or the account agreement provides otherwise, the responsible party may select investments, direct a qualified rollover contribution, direct a qualified ABLE rollover contribution, or select a successor responsible party.
Five types of contributions may be made during the growth period.
- Pilot Program Contributions. The U.S. government will contribute an initial $1,000 pilot program contribution to the account of an eligible individual born after 12/31/24 and before 1/1/29. This contribution won’t be included in the beneficiary’s income.
The pilot program contribution is facilitated through a unique mechanism. Upon a valid election, a “special taxable year” with zero tax liability is created for the beneficiary. The beneficiary is deemed to make a $1,000 tax payment, resulting in a $1,000 overpayment that Treasury refunds directly to the Trump account. This amount isn’t subject to offset for other debts.
2. Qualified General Contributions. States, the United States, the District of Columbia, Indian tribal governments, or Section 501(c)(3) organizations may make qualified general contributions for members of a qualified class of account beneficiaries. On 12/2/25, the Trump administration announced the first qualified general contribution: Michael and Susan Dell donated $6.25 billion, to be used to make a $250 contribution to the first 25 million children under age 11 living in zip codes with median income below $150,000. Other donors have pledged contributions for children in Connecticut and Indiana.
3. Contributions from Other Individuals. The beneficiary, parents, relatives, and others can contribute up to $5,000, combined, each year during the growth period, indexed for inflation after 2027. This is the only type of contribution that creates basis in the account. Unlike IRA contributions, contributions may be made even if the beneficiary doesn’t have includible compensation. However, the extended IRA contribution deadline under IRC Sec. 219(f)(3) doesn’t apply; contributions should be made by December 31.
A contribution to a Trump account won’t affect the beneficiary’s ability to make a full traditional or Roth IRA contribution if all other IRA requirements are met. However, due to what was likely a legislative oversight, IRC Sec. 530A doesn’t treat contributions as completed gifts of a present interest. Until Congress enacts a technical correction, contributions to a Trump account likely aren’t eligible for the annual gift tax exclusion. Clients making contributions may be required to file Form 709 and use a portion of their lifetime applicable exclusion amount.
4. Employer Contributions. Employers may contribute up to $2,500 per year, adjusted for inflation after 2027, to a Trump account for an employee or the employee’s child. Employers may also offer participation through a salary reduction arrangement under a Section 125 cafeteria plan. Employer contributions aren’t included as income for the employee or child. However, employer contributions and salary reduction contributions count against the total $5,000 annual cumulative contribution limit.
5. Qualified Rollover Contributions. Qualified rollover contributions are transfers during the growth period from a prior Trump account to a new rollover Trump account. New rollover Trump accounts can’t be established after the growth period. After the growth period, a Trump account may be rolled over or transferred to an IRA or other eligible retirement plan for the beneficiary. Qualified rollover contributions carry over basis attributable to the transferred funds.
Contributions to a Trump account aren’t tax-deductible, but earnings grow tax free until distributed.
During the growth period, the governing instrument must ensure no contribution is accepted if it would push contributions over the annual limit. If excess contributions are inadvertently accepted, the excess plus earnings should be distributed by the due date, including extensions, for the beneficiary’s tax return for the year of the excess contribution. The excess amount isn’t included in gross income, but a 100% tax applies to net income attributable to the excess. If excess contributions aren’t timely distributed, the cumulative undistributed excess is subject to an annual 6% excise tax.
Distributions are prohibited during the growth phase, with limited exceptions: qualified rollover contributions, qualified ABLE rollover contributions, excess contributions, and distributions upon the beneficiary’s death.
During the growth period, account funds are limited to mutual funds or ETFs that track a qualified index comprised primarily of U.S. companies, don’t use leverage, are low-cost, and meet other criteria set by the Secretary.
Post-Growth Period
On January 1 of the year in which the beneficiary turns 18, the training wheels come off. After the growth period ends, nearly all special Trump account rules cease to apply. The account continues to be designated a Trump account but generally becomes subject to Section 408 rules applicable to traditional IRAs, including rules related to contributions, distributions, required minimum distributions, rollovers, Roth conversions, ordinary income taxation, and reporting. However, even after the growth period, a Trump account can’t accept SEP or SIMPLE IRA contributions or be aggregated with other IRAs for purposes of calculating the taxable portion of a distribution.
While leaving money in the account until retirement to benefit from additional years of tax-free growth is usually the best option, beneficiaries may need to pull money out early after the growth period. Although a portion of an early distribution will be subject to income tax, exceptions to the 10% penalty may apply, including first-time home-buyer distributions, higher education expenses, or birth or adoption distributions.
Trump Account Planning Opportunities
Saving for a child’s future is a top priority for many families. Other tax-advantaged savings options remain available, including 529 plans, Coverdell ESAs, Roth IRAs, and UGMA/UTMA accounts. The client’s situation and expected use of funds will determine the best way to incorporate a Trump account.
At a minimum, clients with children born in 2025 through 2028 should consider making the election to open a Trump account and receive the $1,000 pilot program contribution, as it represents a no-cost funding opportunity. Additional state, government, charitable, or employer contributions may also be available.
Trump accounts provide long-term compounding potential, with assets potentially remaining in the account from the year of birth until required minimum distributions begin in retirement. And unlike regular IRAs, contributions can be made even when the child has no earned income. In practice, a combination of accounts often works best. A 529 plan may still be better for education-specific funding, while a UGMA/UTMA account generally offers broader nonretirement flexibility.
Conclusion
Trump accounts are likely to become an important planning topic as the 7/4/26 initial account opening date approaches, but the rules remain new and complex, with important questions still outstanding regarding contributions, investments, and administration.
Editor’s Note: The full article presented above is available in the Practitioner’s Tax Action Bulletin, as National Tax Advisory Memo (NTA-1354), first published in Issue 8 Dated April 28, 2026, along with other valuable tax practitioner articles. Contact Our Sales Team for a Subscription to Checkpoint’s bimonthly Practitioner’s Tax Action Bulletin, which is available in print, and online or to add Thomson Reuters Planner CS to your advisory toolkit.
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