What Is a Trump Account? The New $1,000 Savings Account for Kids, Explained
It's a brand-new type of IRA for children under 18, and the government will seed it with $1,000 for free — but only if a parent actually files the right form. Here's exactly how it works.
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IRS From 4547 (Trump Account Election) - [Download]
IRS Page for Trump Account Start (IRS Official Web Site) - [Link]
If you've never heard of a "Trump Account," you're not behind — this is a genuinely brand-new program, and unless you happened to check your IRS account recently, there's a good chance nobody told you it exists. That matters, because part of it is free money that requires you to actively claim it. Nobody enrolls you automatically.
Here's what it actually is, who qualifies for the $1,000 government contribution, and how to actually set one up.
What a Trump Account actually is
A Trump Account is a new type of tax-advantaged individual retirement account for children under 18, created under the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, and codified under IRC §530A. It functions something like a custodial IRA that starts before the child even has income: money goes in on the child's behalf, grows tax-advantaged inside a restricted investment (more on that below), and eventually becomes an ordinary traditional IRA once the child reaches adulthood.
Unlike a normal IRA, a Trump Account doesn't require the child to have earned income, and contributions aren't restricted based on household income — two rules that normally apply to IRAs and don't apply here.
The $1,000 government contribution — who actually qualifies
This is the part most people are searching for. The federal government will make a one-time $1,000 "pilot program" contribution to the Trump Account of every eligible child — but only for children born between January 1, 2025, and December 31, 2028. If your child was born outside that window, you can still open a Trump Account for them, but the free $1,000 seed deposit doesn't apply.
To be eligible for a Trump Account at all (with or without the $1,000), a child needs to meet three conditions:
Under age 18 at the end of the calendar year you file
A valid Social Security number that's valid for employment (not one marked "Not Valid for Employment")
No existing Trump Account already open in their name — each child can only have one
How to actually claim it: Form 4547
To open the account and elect the $1,000 contribution, a parent, legal guardian, or other authorized individual (adult siblings or grandparents can act in priority order if no parent or guardian is available) needs to file IRS Form 4547 ("Trump Account Election(s)"). You have a few ways to do this:
File it with your 2025 tax return (due April 15, 2026) — the most common path, since most tax software now includes it as an option.
Submit it electronically through your IRS Online Account, where you can also track the status of your election in real time.
Use the Trump Accounts app or TrumpAccounts.gov portal — the app allows submitting up to 16 forms at once, useful for families with multiple eligible children (each paper Form 4547 covers a maximum of two children).
You can technically file Form 4547 any time before the year your child turns 18 — it isn't limited to a single tax season — but filing it with your 2025 return is the most direct route if you want the account ready as soon as contributions open.
When money can actually start going in
Even though you can file Form 4547 now, contributions to Trump Accounts don't begin until July 2026. That includes both the government's $1,000 pilot contribution and any money you or an employer want to add. Once your Form 4547 is processed and your child's eligibility confirmed, you'll get a notification (by email from the Treasury and an in-app alert) with instructions to activate the account through an authentication process — that activation step is required before the account is actually usable.
How much you can add on top of the $1,000
Beyond the government's one-time contribution, individuals and employers combined can contribute up to $5,000 per child per year until the year the child turns 18. A notable feature: employers can contribute through a pre-tax payroll deduction via a cafeteria plan, similar to how some employers offer 401(k) matching — several major companies have already signaled plans to contribute to employees' children's Trump Accounts.
What the money is actually invested in
Trump Account funds aren't a free-for-all — the money is restricted to a low-cost fund tracking a broad U.S. equity index (functionally similar to an S&P 500 index fund), not individual stock-picking. The U.S. Treasury also assigns the account's custodian at launch; families can't choose their own financial institution to hold the account, at least initially.
What happens when the child grows up
Once the child reaches adulthood, the Trump Account converts into an ordinary traditional IRA, subject to normal IRA rules from that point forward — including the standard 10% early-withdrawal penalty for distributions taken before age 59½. It's worth knowing that the government's $1,000 contribution was made pre-tax, so both that amount and any earnings on it will be taxed as ordinary income whenever it's eventually withdrawn — the same way a traditional IRA withdrawal is taxed.
Why this is worth doing even if $1,000 sounds small
A one-time $1,000 contribution invested and left untouched for roughly 18 years, compounding inside a tax-advantaged account, can grow into a meaningfully larger sum by the time a child reaches adulthood — the exact amount depends on market performance, but the underlying logic (start early, let compounding do the work) is the same principle behind most long-term retirement investing advice. The strategy costs a parent nothing but the time it takes to file one form.
The bottom line
Trump Accounts are new enough that a lot of eligible families haven't heard of them yet, and the $1,000 government contribution specifically requires action — filing Form 4547 — rather than happening automatically. If you have a child born between 2025 and 2028, checking your IRS Online Account or filing the form with your 2025 return costs very little and secures free money that starts compounding the moment contributions open in July 2026.
This article is for general informational purposes only and is not tax or investment advice. Trump Account rules, contribution limits, and program details are new and may be updated by the IRS or Treasury. Confirm current details at TrumpAccounts.gov or with a qualified tax professional.
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