Trump accounts are a newly created form of individual retirement account designed specifically for eligible minors. Parents, guardians, or other authorized individuals can open these accounts for qualifying children, and in certain cases, the government will contribute a one-time $1,000 pilot program deposit.
Who Can Have a Trump Account?
A child qualifies for a Trump account if they meet these requirements:
- Age: The child must be under 18 at the end of the calendar year when the account is created.
- Social Security number: A valid SSN is required.
Note: Children born before January 1, 2025, who haven’t reached age 18 can still open a Trump account but are not eligible for the $1,000 pilot contribution.
Details of the $1,000 Pilot Contribution
In addition to the general eligibility above, the pilot contribution is available only to children who meet all of the following:
- Birth window: Born between January 1, 2025, and December 31, 2028
- Citizenship: Must be a U.S. citizen
- Social Security number: Required to receive the contribution
The election to receive the pilot deposit is made on Form 4547, separate from the account-establishment election, although both actions can be completed together on the same form.
Filing Process for Tax Season
Form 4547 will be used for:
- Setting up a Trump account
- Electing the $1,000 government contribution (if eligible)
Tax professionals can submit Form 4547 alongside the authorized individual’s 2025 income tax return, making it a natural topic to raise during filing appointments.
How Trump Accounts Fit with Other Savings Tools
Trump accounts add another option to a family’s financial planning toolbox. Key comparisons include:
- 529 Plans:
o 529s may still be more tax-efficient and offer tax-free growth and withdrawals when used for education.
o Trump accounts have no usage restrictions after age 18, but withdrawals are taxable. Trump accounts offer more flexibility. - UGMA/UTMA Accounts:
o Trump accounts bypass the kiddie tax rules.
o Custodial accounts provide more investment flexibility, but the child gains control earlier (usually 18–21), while Trump accounts block withdrawals until age 18. - Roth IRAs for Minors:
o Contributions to a Trump account do not affect Roth IRA contribution limits.
o Roth IRAs require earned income and offer tax-free growth; Trump accounts have no earned income requirement but only tax-deferred growth.