Estimate your child's balance at 18
How Trump Accounts work — the 60-second version
Trump Accounts were created by the One Big Beautiful Bill Act signed in July 2025 and are governed by new Section 530A of the Internal Revenue Code. They are a special kind of individual retirement account opened on behalf of a child under 18, designed to give every American kid a head start on long-term investing.
The key rules
- $1,000 federal seed: the U.S. Treasury makes a one-time $1,000 pilot contribution for every eligible U.S. citizen child born January 1, 2025 through December 31, 2028, once an election is made (generally by a parent or guardian).
- Any child under 18 can have an account: the $1,000 seed is limited to the 2025–2028 birth cohort, but parents can open an account and contribute for any child who hasn't turned 18 by the end of the election year.
- $5,000 annual contribution limit: family and friends can contribute up to $5,000 per year in total (indexed to inflation after 2027). Contributions are not tax-deductible. No contributions are allowed before July 4, 2026.
- Employer contributions: employers can contribute up to $2,500 per year for an employee's child — it counts toward the $5,000 cap but is excluded from the employee's taxable income. See how much that's worth →
- Investments are restricted: funds must be invested in low-cost mutual funds or ETFs tracking the S&P 500 or another index of primarily U.S. equities.
- Locked until 18: withdrawals generally aren't permitted before January 1 of the year the child turns 18. After that the account is treated as a traditional IRA — earnings withdrawn before age 59½ are taxed as ordinary income and may face a 10% penalty unless an exception applies.
Want to know whether your child qualifies for the $1,000? Take the 30-second eligibility check. Wondering whether to use this or a 529 plan? See our Trump Account vs 529 vs custodial Roth comparison.
Frequently asked questions
What is a Trump Account?
A new tax-advantaged savings account for children under 18, created by the One Big Beautiful Bill Act (IRC Section 530A). Money is invested in U.S. stock index funds, grows tax-deferred, and converts to traditional IRA treatment when the child turns 18.
Who gets the $1,000 federal contribution?
U.S. citizen children born January 1, 2025 through December 31, 2028, once a parent or guardian makes the election. The IRS began preparing account activation in 2026 — see trumpaccounts.gov for the official process.
How much can I contribute?
Up to $5,000 per year combined from individuals, plus charitable/governmental contributions. An employer can put in up to $2,500/year (within the $5,000 cap) tax-free to you. Contributions start July 4, 2026 and the limits index to inflation after 2027.
Are contributions tax-deductible?
No. Personal contributions are after-tax (like a Roth IRA). The account grows tax-deferred, and at withdrawal your own contributions come back tax-free while earnings, the federal seed, and employer contributions are taxed as ordinary income.
When can the money be used?
Generally not before January 1 of the year the child turns 18. After that, traditional IRA rules apply — which means using it at 18 for college or a house may trigger taxes and penalties on earnings. More on withdrawal strategy →