Trump Accounts

The IRS has released Notice 2025-68, which provides initial guidance and intent to propose regulations regarding Section 530A of the Internal Revenue Code (IRC). Section 530A, established by H.R. 1, commonly referred to as the One Big Beautiful Bill Act (OBBBA), created new Individual Retirement Accounts (IRAs) known as Trump accounts.

Trump accounts are established by a trustee for the exclusive benefit of an eligible individual, known as the account beneficiary. Eligible individuals are U.S. citizens who have not reached the age of 18 before the close of the calendar year in which the account is established.

Contributions

The annual contribution limit is $5,000 per child, with cost-of-living adjustments (COLAs) beginning after 2027. This limit is separate from and does not count against contribution limits to any other IRA. The $5,000 limit does not include any exempt contributions, which consist of pilot program contributions, qualified general contributions, or qualified rollover contributions (discussed below).

The IRS has detailed five sources of contributions to Trump accounts:

1. Pilot Program Contribution
   1. Parents with children born between January 1, 2025, and December 31, 2028, are eligible for a one-time contribution of $1,000 from the U.S. Treasury to the child’s Trump account.
   2. To receive the contribution, the parent can fille Form 4547, Trump Account Election(s), with their income tax return. Additionally, parents will be able to make the election online using a forthcoming online portal. The portal is expected to launch in the summer of 2026.
2. Qualified General Contributions
   1. General contributions are those made by a state or 501(c)(3) tax-exempt organization and distributed to a class of account beneficiaries.
   2. For example, the Dell family has made a philanthropic contribution which provides $250 to Trump account holders age 10 and under residing in ZIP codes with median incomes less than $150,000.
3. Employer Contributions
   1. Under IRC Section 128, employers may make contributions of up to $2,500 per employee to employees or dependents of employees. These contributions are excluded from employees’ wages. (Note: the $2,500 limit is per employee, not per dependent of said employee.)
   2. Section 128 contributions must conform to the same eligibility and limitations of IRC Section 129 (relating to dependent care assistance programs.)
4. Qualified Rollover Contributions
   1. During the growth period (defined below), a subsequent Trump account may be established for an individual. The account must be funded by a trustee-to-trustee transfer of the entire account balance.
   2. Current guidance is silent on the possibility of rolling funds from a standard IRA to a Trump account. However, funds can be rolled from a Trump account to an ABLE account during the growth period (defined below).
5. Other contributions
   1. Contributions from any source not listed above. There are no limitations on who can make contributions to the account (parents, grandparents, and even unrelated individuals are eligible to contribute.)

Growth Period and Limitations

The growth period is defined as the period that ends before January 1 of the year in which the beneficiary turns 18. For example, a child born on October 1, 2025, would turn 18 on October 1, 2043. Therefore, the last day of the growth period is December 31, 2042.

• Distributions, including hardship distributions, are generally not permitted from a Trump account during the growth period.
• Investment options during the growth period are limited to mutual funds and low-cost ETFs comprised of primarily U.S. companies.
• Initially, Trump accounts will be administered by the government. However, trustees will be able to transfer Trump accounts to their preferred brokerage.
• At the end of the growth period, the account will automatically transition to a traditional IRA, and standard IRA rules under IRC Section 408 apply.

Analysis & Planning Opportunities 

The goal of Trump accounts are to provide a highly flexible savings vehicle which will allow parents to jump-start their children’s retirement, defer income, and shift wealth to younger generations.

• There are no limitations on a parent’s income to be eligible for the $1,000 pilot program contribution. Therefore, any parent with a child born during the eligibility period should consider making the election on Form 4547 with their income tax return.
• There are no limitations on who can contribute to a Trump account. Families should consider making contributions that allow them to shift wealth to younger generations. For example, a grandparent could contribute $5,000 per grandchild per year. Note that the contributions will be considered a gift and therefore count toward the annual exclusion amount.
• Unlike an IRA, there are no requirements for a beneficiary to have compensation. Parents with children who do not have compensation should consider opening a Trump account. Children who do have compensation can maximize their savings potential by contributing to both an IRA and a Trump account.
• Employers should consider offering contributions to Trump accounts as a benefit to employees. However, business owners who employ spouses or dependent children are not eligible to make non-taxable contributions to those related employees’ Trump accounts.