Trump Accounts: A Complete Guide for Parents and Grandparents
By Paul Savini, Viable.
Updated July 1, 2026
This guide reflects federal guidance current as of the date above. Trump Account regulations are still evolving,
so please talk with your Viable team before acting on anything you read here.
Four Numbers to Know
July 4, 2026
Accounts open and funding can begin.
$1,000
The one-time federal seed deposit for eligible children born from 2025 through 2028.
$5,000
The annual contribution limit from all sources combined.
Age 18
The account converts to a standard traditional IRA.
A Trump Account is a new tax advantaged retirement account created for children under the One Big Beautiful Bill
Act (OBBBA). Here is what matters most:
July 4, 2026: Accounts open and funding begins.
$1,000: Federal seed deposit for eligible children born 2025 through 2028.
$5,000: Annual contribution limit from all sources combined.
Age 18: The account converts to a standard traditional IRA.
Below we walk through who qualifies, how to open one, how the money works, and what changes when your child
becomes an adult.
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1. Who can open a Trump Account, and who it benefits
A Trump Account is a new type of tax-advantaged traditional IRA created for children under OBBBA, which was signed into law on July 4, 2025. The account is officially known as a “Section 530A account.” The child is always the legal owner, even though an adult manages it on the child’s behalf until the child turns 18.
Who the account is for. Any child under age 18 may have a Trump Account opened on their behalf, provided that the child has a Social Security number issued before the account is opened, and an election to open the account is made on or before December 31 of the year the child turns 17. There are no household income limits, and unlike a traditional IRA, the child does not need earned income for contributions to be made. Only one Trump Account may exist for a child at any time.
Important: The $1,000 seed deposit is not automatic. The account has to be opened and the election has to be made for an eligible child.
Who can open the account, the “authorized individual.” Not just anyone can open the account. The IRS uses a strict priority order to determine who is the “authorized individual” permitted to make the election, and the rule that applies depends on whether the $1,000 federal pilot deposit is being requested at the same time.
If the $1,000 pilot contribution is being elected at the same time the account is opened, the authorized individual must be the person who anticipates the child will be their “qualifying child” for federal tax purposes that year, which in practice is almost always a parent.
If no pilot contribution election is being made at the same time (for example, because the child was born before 2025 and is not eligible for the $1,000), the authorized individual is, in strict order of priority: first a legal guardian, then a parent, then an adult sibling, then a grandparent. A person may only make the election if no one with higher priority is available.
For non-parents: Legal guardians and parents have first priority. Adult siblings and grandparents rank below them, in that order, and generally cannot open or be named the authorized individual if someone with higher priority is available. This does not prevent grandparents, siblings, or other relatives from contributing money to the account once it exists. See Section 3 for how contributions and gifting work.
Whoever makes the election becomes the account’s “responsible party,” with authority to select investments, request a rollover to a different custodian, or name a successor responsible party while the child is too young to act. By filing the election, that person is attesting under penalty of perjury that they are authorized to act and that no one with higher priority is available. Only the first election the IRS processes for a given child creates an account. Any later election for the same child is automatically blocked.
For grandparents: You generally cannot open the account if a parent or guardian is available, but you can contribute once the account exists.
2. When and how to open an account
Timeline. Elections to open an account can be filed at any time, on a rolling basis. There is no enrollment window or annual deadline tied to a specific filing season. Accounts officially launch July 4, 2026, which is the earliest date any funding, including the $1,000 federal seed deposit, can be deposited. An election to open an account must be made on or before December 31 of the calendar year the child turns 17.
Two ways to make the election. First, IRS Form 4547, Trump Account Election(s) (irs.gov/forms-pubs/about-form-4547), a one page form that can be filed on paper, attached to a federal income tax return, or submitted electronically through your IRS Individual Online Account. Second, the online portal at trumpaccounts.gov, the Treasury Department’s dedicated site and companion mobile app, which lets authorized individuals make the same election without filing a separate tax form.
Step by step:
- Confirm who, under the priority order in Section 1, is the authorized individual for the child.
- Gather the child’s Social Security number and confirm it matches their Social Security card.
- File Form 4547 (paper, with a tax return, or electronically) or complete the election at trumpaccounts.gov.
- If the child was born between January 1, 2025, and December 31, 2028, elect the $1,000 federal pilot contribution on the same form.
- Watch for activation instructions from the Treasury Department or its agent once the election is processed.
- After July 4, 2026, fund the account by bank transfer, check, or brokerage transfer, subject to the annual limits in Section 3.
A note on timing: Filing the election early does not accelerate funding. No money, not the $1,000 federal deposit and not family contributions, can move into any Trump Account before July 4, 2026, regardless of when the election was filed.
3. Account particulars: contributions, seed money, investments, and gift tax
Annual contribution limit. During the “growth period,” which runs from account opening through December 31 of the year before the child turns 18, total contributions from all individual and employer sources combined are capped at $5,000 per year per child. This limit will be indexed for inflation starting in 2028. Exceeding it triggers a 6% excise penalty on the excess amount, assessed annually until corrected.
Seed money. Children who are U.S. citizens, have a valid Social Security number, and were born between January 1, 2025, and December 31, 2028, may receive a one-time $1,000 deposit from the U.S. Treasury. This is not automatic. The authorized individual must elect it, and it does not count against the $5,000 annual limit. Separately, some children born before 2025 may qualify for smaller charitable deposits, for example, $250 contributions pledged by certain private foundations for children in qualifying ZIP codes or states. These also fall outside the $5,000 annual limit.
Who can contribute, and how. Once an account is open, contributions are not restricted to the authorized individual. Anyone may contribute, subject to the shared $5,000 annual cap. Parents, grandparents, other relatives, and friends may contribute directly in after-tax dollars by cash, check, money order, or electronic transfer. A grandparent does not need to route a gift through a parent. Employers may contribute up to $2,500 per year on behalf of an employee or an employee’s dependent, which is excluded from the employee’s taxable income but still counts toward the $5,000 cap. Governments and charities may make “qualified general contributions” to a defined class of beneficiaries, and these do not count toward the $5,000 limit.
Contribution note: The $5,000 annual contribution limit applies to all contributions combined, including parents, grandparents, friends, and employer contributions.
Investments and custodians. During the growth period, Trump Account funds may be invested only in low-cost index mutual funds or ETFs composed predominantly of U.S. companies, with an expense ratio capped by law at 0.10%. No leverage and no individual stock picking are permitted while these special rules apply. At launch, families do not select their own custodian. On April 6, 2026, the Treasury Department officially designated Bank of New York Mellon (BNY) as the program’s financial agent, with Robinhood serving as the brokerage and initial trustee. Every initial account is held through this BNY/Robinhood infrastructure by default, accessed through a Treasury-branded app built on Robinhood’s platform.
A number of employers, including BNY itself along with several large public companies, have pledged to match the federal $1,000 seed contribution for their employees’ children. It is worth asking your own employer’s HR or benefits team whether a similar match is available to you.
One limitation worth flagging: because the initial onboarding platform is built on Robinhood’s existing retail infrastructure, it may require a U.S. residential address to complete setup. Families with children living abroad may need to wait for Treasury to announce an alternative registration path before they can open an account through the official app.
Once an initial account is funded, the responsible party may request a qualified rollover, a full trustee-to-trustee transfer of the entire account balance, to a different IRS-approved trustee or custodian. Partial transfers are not permitted. Any IRA custodian already IRS-approved as of December 31, 2025 automatically qualifies, so most major brokerages and banks are eligible. The receiving custodian, not the family, is responsible for tracking and reporting the account’s basis and contribution history going forward.
Tax note: Federal tax treatment does not always mean state tax treatment is the same. Families should check their own state before making assumptions.
Gift tax treatment. This changed very recently and is worth understanding clearly. For most of 2026, it was unclear whether contributions from individuals would qualify for the annual gift tax exclusion, since the child cannot access the funds until age 18, a feature that normally makes a gift a “future interest” ineligible for the exclusion. On June 29, 2026, the IRS resolved this. Under Revenue Procedure 2026-25, qualifying cash contributions are now treated as completed, present interest gifts, eligible for the annual per recipient gift tax exclusion ($19,000 in 2026). In practice, a parent, grandparent, or other individual can contribute up to the $5,000 account limit without filing a gift tax return (Form 709), provided their total gifts to that child for the year stay within the $19,000 annual exclusion. The contribution still uses up part of that $19,000 exclusion, alongside any other gifts such as 529 contributions. This safe harbor applies only to cash contributions made before the year the child turns 18, and only if no gift tax return is otherwise required for that donor.
A note on state tax treatment: Trump Accounts receive tax deferred treatment under federal law, but not every state automatically conforms for state income tax purposes. As of this writing, California, Hawaii, Kentucky, Massachusetts, Pennsylvania, South Carolina, and Wisconsin have been reported as not yet conforming. This list reflects current reporting and is likely to change. Because Viable serves clients across many states, please confirm the treatment in your state with your Viable team and your tax preparer before assuming the federal treatment will apply at the state level.
4. Turning 18 and beyond
The special rules that make a Trump Account different from an ordinary IRA apply only during the growth period, from the day the account opens through December 31 of the year before the child turns 18. Once the child turns 18, most of those rules fall away, and the account is governed by the same rules as any traditional IRA.
What changes at 18. The $5,000 Trump Account cap no longer applies, and ordinary traditional IRA contribution limits and earned income requirements take over. Withdrawals become possible: during the growth period, distributions are generally not allowed except in narrow cases (excess contributions, a rollover, or the beneficiary’s death), but afterward the now adult owner can take distributions under standard traditional IRA rules. Standard IRA taxation applies, so withdrawals of earnings and any pre-tax contributions are taxed as ordinary income, and a 10% early withdrawal penalty generally applies before age 59 and a half, subject to the usual exceptions such as qualified higher education expenses or a first home purchase. Investment restrictions loosen too: the 0.10% expense cap and the limit to low-cost index funds apply only during the growth period, so afterward the account can access the same investment menu as any other traditional IRA at that custodian.
Estate and beneficiary considerations. When the account is opened, the responsible party names a beneficiary who will control the account if the child does not survive to take ownership. This designation overrides instructions in a will or trust, so it deserves the same care as any other beneficiary designation. If the child passes away during the growth period, the account loses its special status, and its value, less any after-tax contributions, becomes taxable ordinary income to the named beneficiary or the estate that year. If the child passes away after the growth period, standard inherited IRA rules apply.
Planning note: Because a Trump Account becomes a fully flexible traditional IRA at 18, families often pair it with a 529 plan or custodial account earmarked for education, while treating the Trump Account as a longer-horizon, retirement-style asset. Ask your Viable team how a Trump Account fits alongside the other savings vehicles already in place for your children or grandchildren.
Frequently Asked Questions
What is a Trump Account?
A new tax-advantaged traditional IRA for children, created under the One Big Beautiful Bill Act. Officially, it is a “Section 530A account.” The child owns it, and an adult manages it until the child turns 18.
When can I open one and start funding it?
You can file the election now, on a rolling basis. But no money can go in before July 4, 2026, including the $1,000 federal seed. Filing early does not speed up funding.
Who qualifies?
Any child under 18 with a Social Security number issued before the account opens. The election must be made by December 31 of the year the child turns 17. There are no income limits, and the child does not need earned income.
How does the $1,000 federal deposit work?
Children who are U.S. citizens with a valid Social Security number, born between January 1, 2025 and December 31, 2028, can receive a one time $1,000 Treasury deposit. It is not automatic. You have to elect it, and it does not count against the annual $5,000 limit.
Who is allowed to open the account?
The IRS uses a priority order. If you are claiming the $1,000 at the same time, it must be the parent who will claim the child. Otherwise the order is legal guardian, then parent, then adult sibling, then grandparent, and you can only act if nobody higher is available.
Can grandparents contribute?
Yes. Once the account exists, anyone can contribute directly, including grandparents, without routing money through a parent. Grandparents usually cannot be the one to open the account if a parent or guardian is available, but they can fund it.
How much can go in each year?
$5,000 per child per year from all sources combined (parents, grandparents, friends, employers). Employers can add up to $2,500 of that on behalf of an employee or dependent. Going over triggers a 6% annual penalty on the excess.
Do contributions count against the gift tax?
As of Revenue Procedure 2026-25 (issued June 29, 2026), qualifying cash contributions are treated as completed, present interest gifts, eligible for the annual gift tax exclusion ($19,000 in 2026). You can contribute up to the $5,000 limit without filing a gift tax return, as long as your total gifts to that child for the year stay under $19,000. It does use up part of that exclusion.
How is the money invested?
During the growth period, only in low-cost U.S. index funds or ETFs with an expense ratio capped at 0.10%. No leverage or individual stock picking. At launch, Treasury assigns the custodian, but you can later roll the balance to most major brokerages or banks.
What happens when my child turns 18?
It becomes a standard traditional IRA. The $5,000 cap and the investment restrictions go away, normal IRA contribution rules apply, and withdrawals become possible under standard rules (ordinary income tax, plus a 10% penalty before age 59 and a half with the usual exceptions).
Does my state tax it the same way the federal government does?
Not always. Trump Accounts get tax-deferred treatment federally, but California, Hawaii, Kentucky, Massachusetts, Pennsylvania, South Carolina, and Wisconsin have been reported as not yet conforming. This list is changing, so confirm your state’s treatment.
How is this different from a 529 plan?
A 529 is earmarked for education. A Trump Account becomes a flexible retirement-style IRA at 18. Many families use both, treating the Trump Account as a longer-horizon asset.
Helpful links
trumpaccounts.gov – the official Treasury Department site and portal.
irs.gov/trumpaccounts – the IRS central hub for Trump Account guidance.
About Form 4547 (irs.gov/forms-pubs/about-form-4547) – the election form used to open an account and request the $1,000 pilot contribution.
Instructions for Form 4547 (irs.gov/instructions/i4547) – detailed IRS guidance on eligibility, priority order, and contributions.
IRS Individual Online Account (irs.gov/payments/your-online-account) – to view and submit your election electronically.
U.S. Treasury Press Release: BNY designated as financial agent for Trump Accounts
Important disclosures
This guide is provided by Viable Planning, LLC (“Viable”) for general educational purposes only. It is not intended as, and should not be relied upon as, individualized tax, legal, or investment advice. Trump Accounts are a new program created under the One Big Beautiful Bill Act, and federal guidance has continued to evolve through the date of this guide and may change further after publication. State tax treatment varies and, in some states, may not conform to federal treatment. Before opening an account, making a contribution, or relying on any tax treatment described here, please consult your Viable advisor along with a qualified tax professional or attorney regarding your specific circumstances.
Information here is current as of July 1, 2026, and reflects publicly available IRS and Treasury Department guidance as of that date, including Revenue Procedure 2026-25 issued June 29, 2026 and Treasury’s April 6, 2026 designation of BNY and Robinhood as the program’s initial financial agent and trustee.
Questions about Trump Accounts? Reach out to your Viable team.