A new federal savings initiative known as Trump Accounts officially launched on July 4, 2026. Created by the One Big Beautiful Bill Act (OBBBA), the program is designed to help children begin building long-term wealth through tax-advantaged investing in broadly diversified U.S. stock market funds. The accounts combine government funding, private contributions, and long-term investment growth to encourage saving from an early age.
Any child under age 18 with a valid Social Security number may have a Trump Account established on their behalf. Opening an account is relatively straightforward. Parents and guardians may complete IRS Form 4547 online through the official enrollment website, www.trumpaccounts.gov, or submit the form with a federal income tax return. The IRS uses the information provided to establish the account and determine eligibility for any available government funding.
The account is owned by the child but managed by a parent or legal guardian until the child reaches adulthood. Investments are restricted to approved low-cost index funds and ETFs that track broad U.S. stock market indexes, helping keep investment costs low while providing diversified market exposure.
For many families, the most attractive feature of the program is the federal government’s one-time $1,000 seed contribution. Children who are U.S. citizens and born between January 1, 2025, and December 31, 2028, are eligible to receive this contribution once a Trump Account is established and the appropriate election is made. The $1,000 government deposit does not count against any annual contribution limits.
In addition to the federal contribution, families can make annual contributions of up to $5,000 on behalf of a child. Unlike traditional IRAs, children do not need earned income to receive contributions. Parents, grandparents, relatives, and friends may all contribute toward the annual family limit.
In addition to the tax-deferred growth benefits, Trump Accounts may also present gift and estate planning opportunities. Contributions made on behalf of a child are generally expected to be treated as gifts to the beneficiary and qualify for the annual gift tax exclusion. Rev. Proc. 2026-25, however, provides an IRS transfer tax safe harbor for certain contributions to “Trump Accounts”. As a result, the accounts may provide parents, grandparents, and other family members with an additional vehicle for transferring wealth to younger generations in a tax-efficient manner.
Another important aspect of the program is that certain employer and philanthropic contributions are separate from the $5,000 annual family contribution limit. This means that a child may receive family contributions up to the annual limit while also benefiting from qualifying employer-sponsored contributions capped at $2,500 annually, as well as charitable funding.
One of the largest private commitments to the program comes from Michael and Susan Dell, who pledged approximately $6.25 billion to support Trump Accounts. Under the initiative, the first 25 million qualifying children who enroll are expected to receive an additional $250 contribution.
Current announcements indicate that the Dell-funded contribution is generally intended for children who are age 10 or younger, were born before January 1, 2025, and reside in ZIP codes with median household incomes below $150,000. The program was designed to help children who are too old to qualify for the federal $1,000 newborn contribution still receive an investment to begin building wealth.
Corporate participation is already growing. In addition to the Dell family commitment, Micron Technology has announced a $250 million contribution initiative. SoFi Technologies and JPMorgan Chase have also announced programs intended to support employee participation and contributions to Trump Accounts.
The Treasury Department has further announced that it will accept certain philanthropic contributions, including donations of publicly traded stock, to support the Trump Account program. These charitable contributions provide an additional source of funding and are not treated as part of the family’s annual contribution limit.
Trump accounts are designed to encourage long-term investing and current guidance indicates that withdrawals generally are not permitted before age 18. Upon reaching adulthood, the account is generally treated similarly to a traditional IRA and becomes subject to the applicable tax and distribution rules. Early withdrawals before age 59½ may be subject to a 10% early withdrawal penalty.
Families considering Trump Accounts should also recognize that these accounts serve a different purpose than 529 plans. While 529 plans are primarily designed for education savings, Trump Accounts are intended to provide broader long-term wealth-building opportunities. As a result, many families may find value in utilizing both vehicles as part of a comprehensive financial plan.
For eligible families, Trump Accounts may provide a significant head start toward future financial security. Between the potential of federal contribution, annual family contributions, employer support, charitable funding opportunities, and years of tax-deferred growth, the accounts represent a unique new tool for helping children participate in long-term wealth creation. As additional IRS and Treasury guidance becomes available, families and advisors should continue to monitor developments and evaluate how Trump Accounts fit within their overall planning strategies.
