Parents can now choose to open Trump accounts, while parents of newborns can choose to take money.
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Tax season is upon us and for parents of minor children there is a new form worth paying attention to. The IRS has finally released Form 4547, which allows taxpayers to list an eligible child on a Trump account when filing a 2025 tax return.
Although the main feature of these accounts — the ability to contribute money — will begin later in 2026, taxpayers can participate in the program now by making an election with their 2025 tax return.
Here’s what you need to know.
You have to have an election
You will make the election using Form 4547which is now available on the IRS website. The form is one page, but it serves two distinct functions. First, it allows an authorized individual to choose to open an initial Trump account for a qualifying child. Second, it provides a separate election to claim the $1,000 federal pilot contribution if the child is eligible.
This second part is extremely important. If a taxpayer wants the pilot levy, they must positively request it by selecting the appropriate box. Simply opening the account does not trigger the $1,000 deposit.
(A practical detail parents may appreciate: Form 4547 allows elections for up to two children on a single form. Taxpayers with more than two qualifying children can file additional forms as needed.)
Form 4547 also introduces the concept of “responsible party”. This is a contact person who will work with the Treasury to set up and manage the account.
Time matters
Taxpayers can file Form 4547 with a 2025 return, either on paper or electronically. THE instructions Also note that Form 4547 can be filed after tax season, including through an online portal once it becomes available.
After the election is processed, Treasury will take steps to create the account, including sending activation instructions to the responsible party. This activation process is expected to begin in May 2026 and will include identity verification. Until this step is completed, the account is not fully functional.
What won’t happen anytime soon is funding. No contributions of any kind—whether from parents, employers or the government—can be made before July 4, 2026. This includes the $1,000 pilot contribution.
Who can open an account?
The guidelines make an important distinction between simply opening an account and requesting the pilot contribution.
If a taxpayer chooses to open only an initial Trump account, the IRS establishes a priority order for who qualifies as an authorized person: first a legal guardian, then a parent, followed by an adult sibling, and finally a grandparent.
However, if the taxpayer also claims the $1,000 pilot contribution, the rules are more restrictive. In this case, the authorized person must anticipate that the child will be the qualifying child for the applicable tax year.
This creates an important nuance for families. A taxpayer does not need to have already claimed the child as a dependent on the 2025 return in order to file Form 4547. But choosing this box implies a representation about what is likely to happen. For that reason, the instructions stress that taxpayers claiming the pilot contribution should be sure they meet the election year qualifying rules — if you fill out the form now, that’s 2026.
The IRS also provides some flexibility, noting that an election can remain valid even if the qualifying child’s status later changes, provided other requirements are met. However, taxpayers claiming the pilot contribution should pay close attention to the rules.
Contribution limits and withdrawals
Trump accounts come with a $5,000 annual contribution limit, adjusted for inflation after 2027. But that limit doesn’t apply to all contributions.
The $5,000 cap includes employer contributions under a special employer program and contributions from individuals such as parents or grandparents.
Employer contributions, which are included in the $5,000 cap, cannot exceed $2,500 per year (adjusted for inflation). The good part? They are excluded from taxable income.
Other contributions exceed the $5,000 cap. These include the $1,000 pilot contribution, special general contributions made by governments or charities and certain renewal contributions. These amounts do not reduce the $5,000 annual limit available for family or employer contributions.
Some contributions—including the federal pilot tax, special general taxes, and employer taxes—do not create basis in a Trump account. Instead, contributions made by parents, grandparents or others with after-tax dollars create basis.
You can think of the basis as your cost. In this context, it applies to money that has already been taxed, such as gifts from parents and grandparents, which should not be taxed again.
Here’s why this matters. After the beneficiary turns 18, withdrawals from a Trump account will generally be treated like distributions from a traditional IRA, meaning that part of a distribution may be taxable and part may be a tax-free return of basis. To avoid double taxation of after-tax contributions, the IRS has made it clear that basis must be tracked—which requires careful record-keeping, particularly for accounts funded from multiple sources over time.
Until then, Trump accounts are strictly limited. Because they are intended as long-term savings plans, distributions are generally prohibited when the beneficiary is under 18 years of age. The only withdrawals allowed during this period are limited to specific circumstances, such as transferring the account to another Trump account, correcting excess contributions, or distributing the account after the beneficiary’s death. The guidelines also allow certain qualified conversions, including limited conversions to ABLE accounts once the beneficiary reaches age 17.
No hardship withdrawals are allowed, and you can’t just close the account and distribute it because your circumstances have changed.
However, once the beneficiary turns 18, most of these restrictions are lifted and the account begins to function like a traditional IRA.
Investments
Trump accounts are subject to significant investment restrictions (this was one of the criticisms of the plan). Eligible investments must track US stock indexes, be non-leveraged and have annual fees capped at 0.1%.
IRS guidance also requires managers to maintain procedures to monitor compliance, including the use of default investment options. If an investment becomes ineligible—because, for example, fees increase—corrective action is required.
Cash and money market funds are generally not permitted, except in limited circumstances.
Before submitting Form 4547
Ready to get started? If you plan to file Form 4547 with your 2025 tax return, the instructions suggest making sure you can answer yes to the following:
- The child is under 18 at the end of the election year and has a valid social security number.
- You qualify as an authorized individual (and, if you are claiming the pilot contribution, expect the child to be your eligible child).
- You understand that no contributions can be made before July 4, 2026. and
- You are ready to complete an account activation process in 2026, including identity verification.
Wait, what about that extra seed money?
You may recall that Michael and Susan Dell have pledged $6.25 billion to set up Trump accounts of $250 each for about 25 million children under 10 born before 2025 and therefore ineligible for the $1,000 pilot program. If not enough families with children under 10 have open accounts, the remaining $6.25 billion could go to older children, according to a statement the couple posted online. To be eligible, children must live in ZIP codes with a median household income of less than $150,000.
Information about this money does not yet appear on Form 4547, its instructions, or IRS guidance. More information will likely be published separately.
What’s next for taxpayers?
With Form 4547 now available, parents can open a Trump account as soon as this tax season, even though the funds won’t be available yet. If you are considering joining, please watch the final rules from the Treasury Department and the IRS.
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