The U.S. Treasury Department and the Internal Revenue Service (IRS) have released new guidance on Trump Accounts, a newly created type of individual retirement account (IRA) for eligible children under the Working Families Tax Cuts Act. The guidance was issued in Notice 2025-68 and provides the first comprehensive overview of how these new accounts will operate.
Because this is a brand-new program with long-term financial implications for families, employers, nonprofits, and public entities, understanding the framework early is essential.
What Is a Trump Account?
A Trump Account is a new IRA-style savings account established for eligible children under age 18. These accounts are intended to help families begin retirement-oriented savings early in a child’s life.
An account may only be created after a formal election is made—generally by a parent or legal guardian. Once established, the account follows a specialized structure until the child reaches adulthood.
When Can Contributions Begin?
Although the guidance has now been released, no contributions may be made before July 4, 2026.
However, the federal government will provide a one-time $1,000 pilot contribution for each eligible child who:
- Is a U.S. citizen
- Is born between January 1, 2025 and December 31, 2028
- Has a properly established Trump Account election on file
This government contribution is designed to seed long-term savings early in the child’s life.
Who Can Contribute and How Much?
Trump Accounts allow several types of contributors, each subject to annual limits:
Individuals
Family members or other individuals may contribute up to:
$5,000 per year per child
Employers
Employers may contribute up to:
$2,500 per year for an employee or the employee’s dependent
- These contributions count toward the $5,000 annual limit
- Employer contributions are not taxable to the employee
Government Entities and Charities
Certain governmental bodies and charitable organizations may make qualified general contributions for designated groups of eligible beneficiaries.
All contribution limits will be indexed for inflation beginning after 2027.
How Are the Funds Invested?
Trump Account funds must be invested in approved mutual funds or exchange-traded funds (ETFs) that track:
- The S&P 500, or
- Another index focused primarily on U.S.-based companies
This structure limits investments to broad, domestic equity-based options and excludes individual stock selection.
When Can Funds Be Withdrawn?
Withdrawals are tightly restricted while the child is a minor:
- No withdrawals are allowed before January 1 of the year the child turns 18
- After that point, the Trump Account is generally treated like a traditional IRA
- Standard IRA rules then apply, including:
- Taxation
- Required minimum distributions
- Early withdrawal penalties (if applicable)
New IRS Form on the Way
The IRS has released a draft version of Form 4547 – Trump Account Election(s). When finalized, this form will be used to:
- Establish a Trump Account
- Enroll in the federal $1,000 pilot contribution program
This form will be central to the administration of these new accounts.
What’s Next?
The IRS is actively requesting public comments on multiple aspects of Trump Accounts, including:
- Trustee responsibilities
- Administrative procedures
- Operational rules
Additional regulations and implementation guidance are expected in the coming months.
Why This Matters
Trump Accounts introduce a new long-term savings tool with implications across several sectors:
- Families gain a new early-start retirement savings vehicle for children
- Employers gain a potential new tax-favored benefit option
- Nonprofits and public entities face new planning and contribution considerations
- Tax professionals must prepare for evolving compliance and reporting rules
Because this program is new and still developing, careful planning and early education will be critical before contributions officially begin in 2026.
Final Thoughts
Trump Accounts represent a significant policy shift in how early-life retirement savings may be structured going forward. As regulations continue to develop, staying informed will be essential for families, employers, and organizations considering participation.
If you have questions about how this new program may affect your organization or clients, TrimnerBeckham is here to help you navigate these changes with clarity and confidence.
