The IRS has released some guidance on the new Trump accounts, including details on the $1,000 pilot program for new babies.
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The IRS has released new guidance on Trump accounts, a new type of individual retirement account (IRA) for eligible children created under the One Big Beautiful Bill Act (OBBBA).
What are Trump accounts?
Trump accounts are a new type of retirement savings account created by Congress as part of the OBBBA. According to the OBBBA, a Trump account can be opened for any qualifying child under the age of 18 at the end of that calendar year. A qualifying child must have a social security number.
To open the account, an authorized person (such as a parent or guardian) must make an election. After the election is filed, the Treasury Department will set up the initial Trump account for the child.
The federal government will also deposit a one-time $1,000 “pilot program” contribution into the Trump account of any eligible child (by election) who is a US citizen and whose birth is between January 1, 2025 and December 31, 2028. This $1,000 will not count against any contribution limits.
Funds in Trump accounts are subject to investment restrictions, including that eligible investments are low-cost mutual funds or exchange-traded funds (ETFs) that track U.S. stock indexes, are not leveraged, and have annual fees of no more than 0.1%.
Can parents expect additional contributions?
According to the Trump Account website, the first 25 million American children age 10 and younger who live in zip codes with median incomes below $150,000 and participate in Trump accounts will receive an additional $250. This $6.25 billion in funding will come from Michael and Susan Dell. (Michael Dell is the chairman and CEO of Dell Technologies and has an estimated net worth of $148.9 billion, placing him at #10 on the Forbes 400.)
Is there a limit on contributions?
There is a $5,000 cap on contributions per year, adjusted for inflation. (Contributions in excess of the cap should be withdrawn.)
Contributions can be made by almost anyone, including parents and grandparents – these contributions will count against the $5,000 annual limit.
Employers can also make annual contributions of up to $2,500 to an employee’s or their dependent’s Trump account. An employer contribution will be calculated at the $5,000 limit each year and will not be considered taxable income for the employee.
Certain governmental entities (such as state and local governments) and charitable organizations may also make special general contributions to Trump accounts. Contributions from governments or charities will not count towards the $5,000 limit.
Contributions made by anyone other than an employer, government agency or charity will be made with after-tax dollars, meaning you won’t get a tax deduction for your contributions.
No one can put money into these accounts until July 4, 2026.
What about withdrawals?
Withdrawals from the account are generally not permitted when the child is under 18 years of age. The only exceptions are limited — for example, transferring the entire balance to another Trump account, eliminating extra contributions, or distributing the account if the beneficiary dies.
When the child turns 18, these restrictions largely disappear. At that point, the account would generally operate under the same rules as a traditional IRA.
What is Form 4547?
Form 4547, Trump Account Election, is the form used to make the election for a qualifying child. The IRS states that it publishes a draft version of the form on its website (however, the form does not currently appear in the list of draft forms). When complete, the new form will be filed with Form 1040 and can be used to create a Trump account and enroll in the pilot program.
And yes, the form’s number doesn’t so coincidentally align with Trump’s presidencies (he was elected as the 45th and 47th president of the United States).
Where can I find guidance?
Notice 2025-68 provides an overview of how Trump accounts work and addresses initial questions about setting up initial and rollover Trump accounts, the $1,000 pilot contribution, other contributions — including special general and section 128 employer contributions — eligible investments, distributions, reporting and coordination with rules that apply to other types of IRAs.
What’s next for taxpayers?
This directive is not the same as regulations. The IRS says it plans to issue proposed regulations in the future. Final regulations will follow after a comment period. In the meantime, the agency is directing taxpayers to a new website, trumpaccounts.govfor more information on Trump accounts.
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