How to Open a 2026 Trump Account for Your Child: Updated Guidance for 2026

What are Trump Accounts?

Trump Accounts are tax‑advantaged long‑term savings and investment accounts designed for children under the age of 18. These accounts were established through the One Big Beautiful Bill Act (OBBBA) passed in July 2025 and offer families a structured way to save for their child’s future.

To qualify, a child must:

Be under the age of 18
Be a U.S. citizen
Have a valid Social Security Number

Who owns the account?

While a parent or legal guardian opens and manages the account, the child is legally considered the account owner. Full control transfers to the child beginning January 1 of the year they turn 18.

Who can contribute to the Trump Savings Accounts?

Several parties can contribute to a child’s account, including:

Parents and legal guardians
Grandparents and other relatives
Employers
Certain government entities and charities (these contributions do not count toward the annual limit)

While others can contribute, only parents or guardians can actually open the account on behalf of the child. There are no income thresholds requirements for a parent or guardian to open the account. Unlike traditional IRAs, you are also not required to have earned income in order to contribute to the account.

Contribution Limits

Unlike a 529 savings plan which does not have a federal contribution limit (only state limits), there are annual contribution limits of $5,000 to a Trump Savings Account. Penalties could occur if annual contributions exceed the limit: the IRS may assess a 6% penalty each year until the excess is corrected.

Up to $5,000 per year, indexed annually for inflation
Employers may contribute up to $2,500 (also indexed) for an employee or the employee’s dependent (under the age of 18)—these contributions are not taxable for federal income tax purposes. Keep in mind the employer’s contribution does count toward the $5,000 annual limit.
Contributions by individuals (parents, grandparents, etc.) count toward the $5,000 limit

Gift Tax Considerations

As of February 2026, contributions are not eligible for the annual gift tax exclusion and may require the filing of a gift tax return. This is expected to change, but families should be aware of the rule as it stands today. State tax treatment may differ.

Are Trump Savings Accounts tax-deferred?

Yes! The accounts are tax-deferred, so money grows without being taxed until it’s withdrawn.

Distributions from the account cannot be made until the year that the child turns 18 years old. Once that takes place, the account transitions to traditional IRA rules*, with distributions taxed as ordinary income. Premature distributions made prior to age 59 ½ come with additional penalties, with certain exceptions.

Withdrawal Rules

No withdrawals are allowed before January 1 of the year the child turns 18, except in limited cases, such as:
- Rollover contributions
- ABLE rollovers
- Correcting excess contributions
- Death of the beneficiary

After age 18, the account generally follows traditional IRA rules, including taxation on distributions.

Penalty Exceptions

The 10% early distribution penalty does not apply to withdrawals used for:

Qualified higher education expenses
First‑time home purchases
Distributions after age 59½

Are contributions to the account considered tax deductible?

No, any contributions made to the Trump Account while the child is still a minor is not tax deductible.

Once your child turns 18, this changes. At that point, traditional IRA rules apply, so that any contributions your child makes to their account are tax deductible, with some requirements.

What About the $1,000 Federal Seed Deposit?

The OBBBA also created a one-time $1,000 deposit from the federal government. However, this initial deposit is not for any account beneficiary; only children born between Jan. 1, 2025, and Dec. 31, 2028 are eligible for these one-time deposits. Additionally, the child must have a Social Security number to receive the deposit. Families elect this deposit when opening the account using Form 4547.

Good news: this $1,000 deposit does not count toward the $5,000 limit.

What happens when your child turns 18 years old?

Beginning January 1 of the year your child turns 18, the Trump Account begins to follow traditional IRA rules*.

From that point onward, your child will need eligible compensation in order to contribute to the account. Additionally, only your child will be able to contribute to the account after age 18; parents/guardians may no longer fund the account.

Can you take distributions from a Trump Account?

For children under the age of 18, no distributions are allowed under any circumstances.

This changes once the child turns 18 years old. After that, traditional IRA distribution rules* set in. If the beneficiary takes a distribution prior to age 59 ½, a 10% penalty applies. There are certain exceptions to this early distribution rule.

How do you open a Trump Account?

Trump Accounts will officially become active on July 5, 2026, meaning accounts can be opened and contributions accepted beginning on that date.

To open an account, authorized individuals (parent or guardian) must complete IRS Form 4547, which serves two purposes:

Opens the Trump Account
Elects the $1,000 seed money if the child is eligible

Ways to Submit Form 4547

With the 2025 Tax Return (E‑file)
- The form can be electronically filed through tax software
- Note: Do not amend a previously filed return just to add Form 4547—use another filing method instead
Online via TrumpAccounts.gov
- This portal will allow families to open accounts once the Treasury activates the site
By Mail (Certified Recommended)
- Families may mail Form 4547 to the IRS address listed on IRS.gov
- Certified mail is recommended for tracking and proof of delivery

Additional Notes

Multiple children can be included on one Form 4547
The Treasury will begin issuing informational materials to authorized individuals starting in May 2026, for accounts that have already been opened

Important Custodian Rule

At launch, families cannot choose their own financial institution to hold the account. The U.S. Treasury will assign a custodian for every new Trump Account. After the account is established and initially funded, families will be able to transfer the balance to a brokerage firm of their choice. This will create future advisory opportunities once transfers are permitted.

Should I open a Trump Account for my child?

The answer to this depends on your family’s unique financial situation.

For eligible children, the $1,000 federal contribution basically means “free” money to boost your child’s savings. Additionally, if your employer offers contributions as part of your benefits, this could be another reason to take advantage of these new savings accounts.

However, if you are not eligible for these benefits, you’ll want to evaluate whether the Trump account, a 529 plan, or other savings account is the best fit for preparing for your child’s future, unless you have the available resources to take advantage of all savings options. A tax professional can help you weigh the benefits, compare options, and decide whether it makes sense to add a Trump Account to your long‑term plan.

Plan for your child’s future with Landmark CPAs

At Landmark, our mission is to be a trusted partner as you make financial decisions that matter for your family’s future.

If you have questions about Trump Accounts, 529 plans, or other tax‑advantaged savings options, our team is here to help you understand your choices and build a plan that aligns with your goals.

Contact us today to get started.

Originally posted October 2025. Updated February 2026.

*Please Note: This link is being provided strictly as a courtesy. When you link to the outside website provided here, you are leaving our website, and the linked website is not affiliated with nor endorsed by our website in any way. Landmark Financial provides investment and advisory services, separate from Landmark CPAs. Please visit the Landmark Financial website for more information.