The core Trump account rules are short. A parent or other authorized adult opens the account with Form 4547, the Treasury adds a one-time $1,000 for U.S. citizen children born from 2025 through 2028, and families and employers can add up to $5,000 a year combined, starting July 4, 2026. The money must sit in low-cost U.S. stock index funds and generally stays locked until January 1 of the year the child turns 18.
Trump accounts were created by section 70204 of the One Big Beautiful Bill Act, which added section 530A to the Internal Revenue Code. The IRS explained the details in Notice 2025-68, and this guide walks through the Trump account rules as they stand in October 2026: who can open one, what counts toward the limits, how the money must be invested, and what changes when the child reaches adulthood.
A Trump account is a special type of traditional IRA held for the exclusive benefit of a child. The Instructions for Form 4547 describe it as "a type of traditional individual retirement account (IRA) established by an authorized individual for the exclusive benefit of a child" listed on the form. The child is the owner, called the account beneficiary.
The account runs under two sets of rules over its life:
Every Trump account must have a trustee, which must be a bank or another person the IRS approves as a nonbank trustee. Families can later move the full balance to a new trustee through a trustee-to-trustee transfer, which the IRS calls a qualified rollover contribution.
Eligibility for the account and eligibility for the $1,000 deposit are separate tests. Many children qualify for the first without qualifying for the second.
Account eligibility. An election can generally be made for a child who:
Pilot program eligibility. The one-time $1,000 Treasury deposit goes only to a child who is a U.S. citizen, has a valid SSN, was born after December 31, 2024 and before January 1, 2029, has not had a prior pilot election processed, and is expected to be the qualifying child of the adult making the election. A child born in 2019 can still have a Trump account. That child just does not receive the $1,000.
Who signs. If the only goal is to open the account, the authorized individual is a legal guardian, parent, adult sibling or grandparent, in that order of priority. If the adult is also requesting the $1,000, they must be someone who expects the child to be their qualifying child for the year of the election. Qualifying child status follows the same definition used for the Child Tax Credit, which IRS Publication 501 explains, so the parent who claims the child is usually the right person to elect.
Governments and charities can also fund accounts. Under the statute, states and their political subdivisions, the District of Columbia, the United States, Indian tribal governments and 501(c)(3) organizations may make "qualified general contributions" to a defined class of children. These gifts do not count toward the family's annual limit.
The IRS lists five types of contributions that can go into a Trump account during the growth period. Only some of them count toward the annual limit.
| Contribution type | Who pays | Counts toward $5,000 cap | Creates basis |
|---|---|---|---|
| Pilot program contribution | U.S. Treasury, $1,000 once | No | No |
| Qualified general contribution | States, tribes, the U.S., 501(c)(3) charities | No | No |
| Section 128 employer contribution | Parent's employer, up to $2,500 per employee | Yes | No |
| Qualified rollover contribution | Transfer from a prior Trump account | No | Carries over |
| Contributions from other sources | Parents, grandparents, the child, anyone else | Yes | Yes |
A few points follow from this table.
The $5,000 limit is per child and combined. The IRS news release on Notice 2025-68 says other persons can contribute "up to an aggregate limit of $5,000 per year." Parents, grandparents and an employer all share that one figure. The limit is indexed for inflation after 2027.
No contribution is deductible. The Form 4547 instructions state that no deduction is allowed under section 219 for a contribution to a Trump account. The child also does not need earned income, which is a key difference from a regular IRA.
Employer money is tax-free to the employee, within limits. Under section 128, an employer can contribute up to $2,500 a year to the Trump account of an employee or the employee's dependent, and the employee does not include it in income. The $2,500 is per employee, not per child, is indexed for inflation after 2027, and counts against the child's $5,000 cap. The employer must run a separate written Trump account contribution program with nondiscrimination rules similar to a dependent care plan. Our guide to employer Trump account contributions under Section 128 covers plan design and payroll reporting, and the wider rules for taxable and nontaxable fringe benefits explain where this exclusion sits.
Basis matters later. Family contributions are after-tax dollars, so they create basis that comes back tax-free when the money is eventually withdrawn. The $1,000 pilot deposit, charity and government money, and employer contributions have no basis and will be taxable when distributed. Families should keep a running record of after-tax contributions, the same way an adult tracks nondeductible IRA money on Form 8606.
Nothing could go in before July 4, 2026. The instructions state: "Contributions cannot be made to a Trump account before July 4, 2026." The pilot deposit follows the same start date and arrives once Treasury confirms with the trustee that the account is open.
Dana works for an employer that adopted a Trump account contribution program. Dana has two children: Maya, born March 10, 2026, and Leo, born June 2, 2019. Both have SSNs and are U.S. citizens. Dana files Form 4547 for both and checks the pilot box only for Maya.
| 2026 amounts | Maya (born 2026) | Leo (born 2019) |
|---|---|---|
| Pilot program contribution | $1,000 | $0 (not eligible) |
| Employer, section 128 | $1,500 | $1,000 |
| Parents | $2,500 | $4,000 |
| Grandparent | $1,000 | $0 |
| Total counted toward $5,000 cap | $5,000 | $5,000 |
| Room left for 2026 | $0 | $0 |
| Total deposited | $6,000 | $5,000 |
| Basis (after-tax family money) | $3,500 | $4,000 |
| Amount with no basis | $2,500 | $1,000 |
The employer's $1,500 plus $1,000 equals $2,500, the per-employee maximum, so Dana excludes all of it from wages. Maya receives $6,000 because the $1,000 Treasury deposit sits outside the cap. Any further 2026 contribution to either child from family or the employer would be an excess contribution. Maya's growth period ends December 31, 2043, and Leo's ends December 31, 2036.
During the growth period, a Trump account can hold only "eligible investments." Notice 2025-68 defines these as a mutual fund or ETF that:
At the 0.1 percent ceiling, a $5,000 balance costs at most $5 a year, and a $10,000 balance at most $10. There are no individual stocks, bond funds or target date funds during the growth period.
On August 20, 2026, the Treasury Department announced proposed rules for eligible investments. The release confirms that the State Street SPDR Portfolio S&P 500 ETF (SPYM) is the default investment for all Trump accounts and that four other low-cost index ETFs are available to a parent or other responsible party. The proposed framework would allow indexes that measure "a broad segment of the U.S. or global equity market." As of October 2026 those rules are still proposed, so the statutory test above is the one that applies.
The adult who made the election becomes the responsible party while the child is a minor. That person can choose among the eligible investments, request a rollover to another trustee, and name a successor responsible party.
During the growth period, the only permitted distributions are:
The Treasury and IRS news release puts it simply: "Amounts generally cannot be withdrawn from Trump Accounts before January 1st of the calendar year in which the child turns 18 years old." The date is tied to the calendar year, so a child born in December can access the account almost a full year before their 18th birthday.
After that date the account generally follows traditional IRA rules. The Form 4547 instructions note that withdrawals "could be subject to the section 72(t) 10% additional tax on early distributions, unless an exception applies," naming higher education expenses and a first home purchase as examples. Earnings and the no-basis money are taxable when withdrawn, while basis comes back tax-free. The additional tax is reported on Form 5329, the same form used for other IRAs.
This differs from a custodial brokerage account, where a child's investment income can be taxed each year at the parent's rate under the kiddie tax rules on Form 8615. Inside a Trump account, growth is deferred until withdrawal.
Form 4547, Trump Account Election(s), handles two elections: opening the initial account, and requesting the $1,000 pilot program contribution. According to the IRS page for Form 4547, "Taxpayers use this form for elections to open an initial Trump account and to elect to request a one-time $1,000 pilot program contribution."
The form has four parts:
Ways to file. The IRS says the fastest method is to attach Form 4547 to an e-filed income tax return. The instructions also provide for online elections from the middle of 2026 and point filers to trumpaccounts.gov. A paper form goes to the address for the filer's return at IRS.gov/PaperReturns, must carry a handwritten signature, and must not be attached to Form 1040-X or an amended Form 1040. The form can be filed at any time, and a family whose qualifying event, such as a birth, comes after the return is filed is directed to trumpaccounts.gov.
After filing. Treasury or its agent sends activation details to the adult who made the election, and the account is completed after an identity check. A family that already opened an account can file Form 4547 later just to request the pilot deposit by completing all of Part II and checking line 7 in Part III. In June 2026, the IRS also issued an update to Form 4547 for state, territorial and tribal child welfare agencies.
For tax preparers, Form 4547 is worth raising with any individual client who has a child under 18. Adding a dependent-age check to the 1040 tax prep workflow catches eligible children before the return is filed.
What are the main Trump account rules for contributions? Family members, the child and employers can put in up to $5,000 per child per year combined, starting July 4, 2026. Employer contributions of up to $2,500 per employee count within that $5,000. The $1,000 pilot deposit, government and charity contributions, and rollovers do not count toward the cap.
Is the $1,000 Treasury deposit automatic? No. An authorized adult must elect it on Form 4547 Part III or online, and the child must be a U.S. citizen with an SSN, born from January 1, 2025 through December 31, 2028.
Can a child born before 2025 have a Trump account? Yes. Any child under 18 at the end of the election year with a valid SSN can have an account. Children born before 2025 do not receive the $1,000 pilot contribution.
Are Trump account contributions tax deductible? No. Contributions are not deductible, and the child does not need earned income. Family contributions create basis that is not taxed again on withdrawal, while the pilot deposit, employer money and earnings are taxed when withdrawn.
When can the money be withdrawn? Generally not until January 1 of the year the child turns 18, apart from rollovers, ABLE rollovers at 17, excess contribution corrections and death. After that, traditional IRA rules apply, including the 10% additional tax on early distributions unless an exception applies.
Madras Accountancy supports U.S. CPA firms and their clients with individual tax preparation, bookkeeping and payroll work, including the forms and records that come with new provisions such as Trump accounts. To talk through how we can support your firm's workload, contact our team.
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