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A Trump Account is a new type of traditional IRA for children, created by the Working Families Tax Cuts. Since October 1, 2026, the Treasury has automatically enrolled eligible children, and U.S. citizens born from January 1, 2025, through December 31, 2028, can also get a one-time $1,000 from the federal government. That $1,000 is not automatic: a parent or other authorized individual has to elect it on Form 4547, even if the account already exists.
Left alone at an illustrative 7% a year, $1,000 grows to about $3,513 in 18 years. Add $100 a month and the balance reaches about $46,585. Returns are never guaranteed, and the rules below come from official IRS pages.
What a Trump Account is
The IRS Trump Accounts page calls it "a new type of individual retirement account (IRA) for eligible children." The child owns the account. While the child is young, special rules apply; after that, it is generally treated like any traditional IRA.
The special rules cover the growth period, from opening to December 31 of the year before the child turns 18. For a child born October 1, 2025, the Form 4547 instructions give December 31, 2042, as the last day. During the growth period, the money can only be held in eligible investments, the account has its own contribution limit, nobody gets a tax deduction for contributing, and withdrawals are generally not allowed.
Who is eligible
Having an account and getting the $1,000 are separate questions.
| Requirement | Trump Account | $1,000 contribution |
|---|---|---|
| Age | Under 18 at the end of the year it is set up | Born Jan. 1, 2025, through Dec. 31, 2028 |
| Social Security number | Valid SSN | Valid SSN |
| U.S. citizenship | Not a listed condition | Required |
A 10-year-old with an SSN can have an account but won't get the $1,000.
How to claim the account and the $1,000
Automatic enrollment still leaves steps for you.
- Claim the account. In the Trump Accounts app or website, verify your identity and your authority over the account, then claim and activate it. You can't manage it until you do, and you don't need Form 4547 for this.
- Elect the $1,000. If your child qualifies, submit Form 4547 and select the pilot program contribution, through the app, the website or your IRS Individual Online Account. If you already requested it, you don't need to again.
- Check the details. Names, Social Security numbers and dates of birth should match Social Security Administration records to avoid delays.
- Watch for notices. If something needs fixing, the IRS may send Notice CP318. Follow it and resubmit Form 4547; don't file Form 1040-X to correct it.
If your child wasn't enrolled automatically, Form 4547 also opens an account. To elect the $1,000, the filer must expect the child to be their qualifying child for that tax year.
The Treasury deposits the $1,000 as soon as practicable after the election; none was deposited before July 4, 2026. The IRS Trump Accounts FAQ covers corrections, and the program helpline is 866-USA-4547.
What else can go into the account
During the growth period, the instructions list five kinds of contributions:
- The $1,000 pilot contribution from the Treasury.
- Qualified general contributions from governments or 501(c)(3) charities for a defined group of children.
- Employer contributions under section 128 of the tax code, to an employee's own account or a dependent's. They aren't counted as the employee's income.
- Rollovers of a whole balance from one Trump Account to another.
- Contributions from anyone else: the child, parents, grandparents or any other person.
The first, second and fourth kinds have no annual limit. Everything else, employer money included, shares a limit of $5,000 a year, with employer contributions capped at $2,500 within it. Both are subject to cost-of-living adjustments after 2027. Your child doesn't need earnings for you to contribute.
How the money is invested
During the growth period, the account can only hold a mutual fund or exchange-traded fund (ETF) that tracks an index of primarily U.S. companies. Under proposed regulations issued in August 2026, the fund must also avoid leverage and keep annual fees and expenses at no more than 0.1%. If you don't choose, the trustee picks an eligible investment for you.
Costs should therefore be low, but the money is in stocks, so the balance can fall sharply in a bad year.
When the money can be used
During the growth period, money can leave only through a rollover to another Trump Account, a rollover to the child's ABLE account at 17, a return of excess contributions, or on the child's death. From January 1 of the year the child turns 18, most traditional IRA rules apply, so withdrawals could face the 10% additional tax on early distributions unless an exception applies, such as higher education expenses or a first home purchase.
Your own contributions create basis, which generally isn't taxed again when withdrawn. The $1,000, employer money and all the growth don't, so they are generally taxable when taken out. Keep a record of what you put in.
How much the $1,000 could grow by 18
These projections assume an illustrative annual return compounded monthly, deposits at the end of each month and 18 full years. Treat 18 years as slightly generous: the $1,000 arrives after birth, and the growth period ends before the 18th birthday.
Here r is the annual return, M the monthly deposit and 216 the months in 18 years.
| Plan | Total deposits | At 5% | At 7% | At 9% |
|---|---|---|---|---|
| $1,000 only | $1,000 | $2,455 | $3,513 | $5,023 |
| $1,000 + $50 a month | $11,800 | $19,915 | $25,049 | $31,840 |
| $1,000 + $100 a month | $22,600 | $37,375 | $46,585 | $58,658 |
| $1,000 + $250 a month | $55,000 | $89,756 | $111,193 | $139,111 |
| $1,000 + $5,000 a year | $91,000 | $147,956 | $182,980 | $228,503 |
The last row spreads the current $5,000 limit over 12 deposits of $416.67.
On its own, the $1,000 grows about 3.5 times at 7%. Money at that rate doubles about every 10 years (the Rule of 72 gives 72 ÷ 7 ≈ 10.3), so 18 years is not quite two doublings: $3,513, not $4,000.
Key idea If your child qualifies and nobody submits Form 4547, the account never gets the $1,000, or the $3,513 it could become by 18 at an illustrative 7%. Claiming it takes one form.
A worked example
Take $1,000 plus $100 a month at 7%. The $1,000 grows to $3,513, and the 216 deposits of $100 ($21,600) grow to $43,072. Of the $46,585 total, $23,985 is growth, and the government's $1,000 ends up as just 7.5% of the balance.
Starting late costs more than the deposits you skip. Begin the $100 a month at age 8 instead of birth and the balance is $20,821, not $46,585: you put in $9,600 less but end up $25,764 lower. Simple vs compound interest explains why.
Try your own amount and return in the compound interest calculator, with monthly compounding and 18 years. To work backward from a target, the savings goal calculator gives the monthly deposit you need.
What fees do
Here is the same plan at 7% before fees, after a 0.1% fee and after a 1% fee:
| Plan | After 0.1% fee | After 1% fee | Difference |
|---|---|---|---|
| $1,000 only | $3,450 | $2,937 | $513 |
| $1,000 + $100 a month | $46,063 | $41,672 | $4,391 |
With monthly deposits, the 1% fee costs 9.5% of the final balance; on the lone $1,000 it costs 14.9%. The proposed 0.1% cap covers the account itself, so the gap matters mainly when you compare it with a costlier account elsewhere. See the investment fees guide for 30-year figures.
Trump Account vs 529 plan vs custodial account
| Trump Account | 529 plan | Custodial (UGMA/UTMA) | |
|---|---|---|---|
| Government money | $1,000 if eligible | None federally | None |
| Yearly limit | $5,000 combined | No federal yearly limit | None |
| Taxes | Tax-deferred; IRA rules on withdrawal | Tax-free for qualified education | Income taxed yearly; kiddie tax may apply |
| Access | From the year the child turns 18 | Any time; non-education earnings taxed, generally plus a 10% additional tax | Child takes control at an age set by state law |
They aren't either/or. A 529 suits education savings, a custodial account is the most flexible, and a Trump Account adds the $1,000 and low-cost index investing but locks the money until the child's late teens.
Frequently asked questions
My child was enrolled automatically. Do I still need to do anything?
Yes. You need to claim and activate the account to manage it, and if your child qualifies, you must also elect the $1,000 on Form 4547.
Can a child born before 2025 have a Trump Account?
Yes, with a valid Social Security number, if the child is under 18 at the end of the year the account is set up. Only children born 2025 through 2028 can get the $1,000.
What would $46,585 be worth in today's money?
If prices rise at an illustrative 2.5% a year, $46,585 in 18 years would buy roughly what $29,868 buys today. See what inflation does to your savings.
A checklist for parents
- Check the Trump Accounts app or website to see whether your child has an account, then claim and activate it.
- If your child is a U.S. citizen born 2025 through 2028, submit Form 4547 for the $1,000, unless you already have.
- Make sure names, Social Security numbers and birth dates match Social Security records.
- Check which investment the trustee chose and its annual cost.
- Ask your employer whether it contributes to Trump Accounts.
- Pick a monthly amount you can keep up, and keep records of your contributions.
- If college is the main goal, compare a 529 plan too.
Then run your own figures in the compound interest calculator, and for longer horizons see how much $500 a month can grow.
This article is for general education and is not financial advice. Rules, rates and products vary by lender and country. See our disclaimer.
