The Trump Child account, introduced as part of the One Big Beautiful Bill Act (OBBBA) and codified in Internal Revenue Code (IRC) Section 530A, is designed for children under the age of 18, with the goal of fostering early financial security, investment growth, and financial literacy. The Trump Child account operates much like a traditional IRA but is tailored to the unique needs of minors, providing a structured pathway for long-term wealth accumulation from a young age.

Eligibility for the Trump Child account is broad, encompassing any U.S. citizen under 18 with a valid Social Security number. The account can be opened by a parent, legal guardian, or, in certain cases, by the government itself if no authorized individual acts. There are no income or earned income requirements, making the account accessible to families across the economic spectrum. Contributions to the account are not tax-deductible, but the earnings grow tax-deferred, allowing for compounding growth without current tax erosion. Annual contributions are capped at $5,000 per beneficiary, indexed for inflation after 2027, and employers may contribute up to $2,500 per year.

A unique feature of the Trump Child account is the federal government’s one-time “seed” contribution of $1,000 for children born between January 1, 2025, and December 31, 2028, as part of a pilot program. This government contribution is paid directly into the account and does not count toward the annual contribution limit.

Investment options within the Trump Child account are intentionally limited to low-fee mutual funds or exchange-traded funds that track a qualified U.S. equity index, such as the S&P 500. These restrictions are designed to ensure that the accounts are invested in broadly diversified, low-risk vehicles, and to minimize fees that could erode long-term returns. Contributions cannot be made before July 4, 2026, and the first day for most financial institutions to accept contributions is expected to be July 6, 2026, since July 4 is a federal holiday.

From a tax perspective, the Trump Child account offers tax-deferred growth, meaning that investment earnings are not taxed until distributed. Distributions are generally prohibited before the beneficiary turns 18, except in limited circumstances such as qualified rollovers or upon the death of the beneficiary. Once the beneficiary reaches age 18, the account transitions to a traditional IRA, and the standard IRA rules regarding contributions, distributions, and required minimum distributions apply. While contributions are not deductible and distributions are taxable as ordinary income, the account’s tax-deferred growth and initial government seed funding make it an attractive option for families seeking to build long-term wealth for their children.

Opening a Trump Child account under the OBBBA begins with confirming the eligibility of the child, who must be a U.S. citizen under the age of 18 and possess a valid Social Security number issued before the account is established. The process requires an authorized individual to initiate the account. This individual can be a legal guardian, parent, adult sibling, or grandparent of the eligible child. If more than one person qualifies, any of them may proceed, but the person making the election must attest under penalties of perjury that they are authorized to do so, especially if they are not the child’s legal guardian or parent. The primary documentation required is IRS Form 4547, “Trump Account Election(s),” which can be filed electronically with the tax return for the year in which the election is made or submitted as a paper copy if the election is triggered by a qualifying event, such as the birth of an eligible child. The form should be sent to the IRS address used for mailing tax returns, and an online election option is expected to be available beginning in mid-2026. Once the election is made and Form 4547 is submitted, the Treasury Department will send activation instructions to the authorized individual, who will then complete the account opening process. The Treasury is expected to begin sending activation information starting in May 2026, and further guidance will be available on the official website, www.trumpaccounts.gov.

Once the account is established, the trustee of the Trump Child account assumes responsibility for reporting all contributions, distributions, account value, and basis to both the IRS and the account beneficiary. The reporting requirements are particularly focused on contributions, especially those exceeding $25 from sources other than the IRS, the beneficiary, or the beneficiary’s parent or legal guardian. This ensures that significant third-party contributions, such as those from employers or charitable organizations, are properly disclosed. The trustee must also report distributions from the account, the fair market value, and the investment basis. If a qualified rollover contribution occurs, the trustee of the receiving account must file a report with the IRS within 30 days, providing detailed information about the beneficiary, trustee, and account. These reporting obligations apply until the beneficiary turns 18, at which point the account transitions to a traditional IRA and standard IRA reporting rules, such as Forms 5498 and 1099-R, take effect. The comprehensive reporting framework is designed to ensure transparency and compliance throughout the account’s growth period, safeguarding the integrity of the Trump Child account program.

In summary, the Trump Child account established by the OBBBA is a forward-looking, tax-deferred savings vehicle designed to empower American children with early access to investment opportunities and financial education. Its features, including government and employer contributions, low-fee investment options, and a seamless transition to a traditional IRA at adulthood, reflect a legislative commitment to fostering long-term financial security and opportunity for the next generation.