Tax Savings Accounts for Children: Trump Accounts

The One Big Beautiful Bill Act introduces “Trump Accounts”, a new type of individual retirement account designed for children. From 2026, an authorised person such as a parent or guardian may elect to open an account for a child who is a US citizen, has a Social Security number, and will be under 18 by the end of the relevant calendar year. The election will be made using Form 4547, expected to be available for 2026 tax filings, after which the Treasury Department will establish the account. Contributions may begin on 4 July 2026. Although final regulations are pending, IRS Notice 2025-68 outlines the framework, and further guidance is expected via trumpaccounts.gov once active.

Each Trump Account has a defined “growth period” running until the end of the year before the child turns 18, during which strict rules apply. Investments are limited to low-fee, non-leveraged US index funds, annual contributions are capped at $5,000 per child, and no distributions or tax deductions are permitted. Contributions may come from several sources, including a one-off $1,000 federal deposit for children born between 2025 and 2028, personal after-tax contributions, limited employer contributions, government or charitable Qualified General Contributions, and permitted rollovers. Once the growth period ends, the special restrictions fall away, and the account is generally treated as a traditional IRA under existing tax rules