New in 2026: Trump Accounts (Form 4547)

With the passing of the Reconciliation Bill (H.R. 1)  in late 2025, taxpayers have a new opportunity with the recently developed “Trump account.” These accounts are effectively traditional IRAs established for a taxpayer’s child. The account is designated as a Trump Account upon establishment but is transferred to a normal traditional IRA when the child turns 18. The child’s parents act on behalf of the child until the child turns 18, while the assets are owned by the child from the account’s establishment.

Eligibility

Children 18 or under with a valid social security number are eligible for the account. Additionally, children born between January 1, 2025 and December 31, 2028 qualify for a federal pilot program for the account. This means that the Treasury will seed each eligible child’s account with $1,000. Taxpayers can enroll in these accounts through IRS Form 4547 with the filing of their tax return or by enrolling through the IRS’s online Trump Account application (currently referenced in IRS guidance as trumpaccounts.gov).

Contributions

Trump account contributions are limited to a total of $5,000 a year per dependent child. The federal seed contribution (if applicable) does not count towards this limit and can only be contributed in the year of the newborn child’s account creation.

Contributions to these accounts can come from various sources. Employers may contribute up to $2,500 per year per employee and the amount may be split between children. For example, if an employee has three children with Trump Accounts and their employer participates in a contribution program, the employee may accept up to $833 per child for the calendar year. Individuals, including parents, grandparents, and even the child themselves, may also contribute to the child’s Trump Accounts with post-tax dollars. The total of all employer and individual contributions may not exceed $5,000 per child per year.

Withdrawals

Since the accounts are like traditional IRAs in nature, withdrawals are heavily restricted. Distributions before the age of 18 are not allowed other than limited rollovers. Starting January 1 of the year the child turns 18, the Trump Account is treated as a traditional IRA for tax purposes. At that point, the full IRA framework applies, including the 10% early distribution penalty under IRC Section 72(t) on withdrawals before age 59 ½ unless an exception applies. Standard IRA rollovers, including Roth conversions, are then available.

Conclusion

Trump Accounts are an opportunity for children to begin saving and learn the ins-and-outs of financial discipline. For employers, these accounts allow for an additional business deduction. The accounts will be activated and launched on July 4, 2026, and taxpayers that have elected into the accounts will be notified when next steps are available. To evaluate the application of these accounts for your family or business, consult a tax professional.

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