Trump Accounts for kids: 2026 tax guide, eligibility, and how to open one 

What is a Trump Account?

A Trump Account is a new kind of savings account for kids under the age of 18. It’s a type of IRA (Individual Retirement Account), offering tax-deferred growth, that’s available at birth. However, there are a few key differences:

• Your child doesn't need a job to have one: Unlike a regular IRA, there's no earned-income requirement. A newborn qualifies just as much as a working teenager.
• The government can seed it with $1,000: Kids born between January 1, 2025, and December 31, 2028, get a one-time $1,000 contribution from the federal government.
• Withdrawals are locked until your child turns 18: Outside of a few narrow exceptions, no one can touch the money before your child’s 18th birthday. This lock-out period is called the growth period.
• The investments are restricted: While the account is locked, the money must stay in low-cost index funds tracking the U.S. stock market.
• Personal contributions aren’t tax deductible: Personal contributions to Trump Accounts are made with after-tax dollars and aren’t tax deductible. The plus side is that money that’s taxed going in isn’t taxed again going out.
• At 18, it becomes a traditional IRA: Once your child turns 18, the account follows the standard rules of a traditional IRA, including the usual rules and penalties around withdrawals.

Who is eligible for a Trump Account?

Any child who is younger than 18 and has a valid Social Security number is eligible for a Trump Account for kids.

How much money does the government contribute?

The federal government contributes $1,000 for children born between January 1, 2025, and December 31, 2028. 

It’s important to note that you can still open a Trump Account for your child, regardless of whether they are eligible for the $1,000 contribution or not.

What is IRS Form 4547? 

IRS Form 4547, Trump Account Election(s), is what you’ll use to sign up for a Trump Account for your child, and elect the $1,000 contribution if your child is eligible.

How do you open a Trump Account for kids?

1. Choose how you want to file: You can file Form 4547 by mail, with the help of your local Tax Pro, or online at irs.gov/trumpaccounts. Keep in mind that you must be the child’s parent, legal guardian, adult sibling, or grandparent to file. If the child has a legal guardian, only their legal guardian can file.
2. Complete Form 4547: You'll need your child's Social Security number, date of birth, and address, plus your own SSN or ITIN. This is when you’ll elect the $1,000 government contribution if your child qualifies.
3. Wait for the IRS to process your election: This could take some time, especially if you filed by mail. Filing Form 4547 with your tax return is typically faster, since the IRS can match your child's information against your return. While you wait, consider downloading the Trump Accounts app, so you’re ready to activate and manage your child’s account when it’s ready, or sign in at TrumpAccount.com.
4. Watch for your activation notice: When the IRS is finished processing your election, you'll get an email from no-reply@trumpaccounts.treasury.gov and/or a notification in the Trump Accounts app, letting you know it's time to activate your child’s account.
5. Activate your child’s account: You can activate your Trump Account for kids on the Trump Accounts app or online at TrumpAccount.com. To do so, sign in, verify your identity, and confirm that your child's name, Social Security number, and date of birth match what you submitted on Form 4547.

Take note that Trump Accounts must be opened before December 31, of the year your child turns 17. If you miss this window, you won’t be able to set up a Trump Account for your child.

How much can you contribute to a Trump Account each year?

For 2026 and 2027, the maximum amount you can contribute to a Trump Account for kids is $5,000 per year. Keep in mind that this is not a per-person maximum but applies to all individual contributions. In other words, if your child’s aunt chooses to contribute $5,000, you cannot contribute anything on top of that.

Employers can also contribute to a Trump Account, up to $2,500 per year, for an employee or an employee's dependent. This money counts toward the same $5,000 annual limit, so it's not extra room on top of it. It's a cap within the cap.

There are, however, a few types of contributions that don’t count toward the $5,000 limit:

• The $1,000 contribution from the federal government
• Contributions from non-profits and charitable foundations
• Qualified rollover contributions

These contribution limits are set to adjust with inflation starting in 2028, and they only apply during the growth period. Once your child turns 18, contribution limits for traditional IRAs apply.

It’s also worth noting that if you contribute more than the annual limit, the excess will be charged a 6% penalty each year until you withdraw it.

Can grandparents or other family members contribute?

 Yes, anyone who wants to contribute to your child’s Trump Account can do so, including grandparents, aunts and uncles, family friends, godparents, etc.

If there are multiple people in your child’s life who want to contribute to their Trump Account for kids, make sure to coordinate contributions to avoid going over the per-year limits.

Are Trump Account contributions tax deductible?

No. Contributions to a Trump Account for kids aren't tax deductible, not for parents, grandparents, or for the child themselves.

Although Trump Accounts are structured as traditional IRAs, where contributions are tax deductible and withdrawals are taxed as income, they act more like Roth IRAs in that individual contributions are made with after-tax dollars. But, unlike a Roth, not all withdrawals end up tax free (more on that below).

Do you need to file a gift tax return for contributions?

In general, no. Contributions from individuals, parents, grandparents, and family friends, are treated as gifts for federal gift tax purposes. Every year, you can give a certain amount per person without needing to report it. That annual gift tax exclusion is $19,000 per person in 2026. Since the Trump Account contribution limit is just $5,000 a year, you likely won’t have to worry about filing a gift tax return.

The only time it could come up is if the contributor is already giving your child other large gifts in the same year, and those gifts combined push past the $19,000 exclusion. In that case, work with your local Tax Pro to see if a gift tax return is needed.

What tax forms will you receive for a Trump Account? (Form 5498-TA, 1099-R) 

The two tax forms you will receive for a Trump Account are Form 5498-TA, Trump Account Contribution Information annually, and Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. when distributions are taken.

Form 5498-TA reports contributions to your child’s Trump Account, broken out by source, such as the $1,000 pilot contribution, employer contributions, rollovers, and everyday contributions from parents or family. It also tracks the account's running basis, which is the after-tax money contributed by individuals over the life of the account, as well as the account's total value at the end of the year.

Form 1099-R reports withdrawals, so you don’t need to worry about it until your child is at least 18 years old. When your child makes withdrawals from their Trump Account, Form 1099-R reports those distributions and flags them as coming from a Trump Account so that they are taxed correctly.

When can money be withdrawn?

In most cases, neither you nor your child, will be able to withdraw money from a Trump Account for kids until your child is at least 18 years old.

As we previously mentioned, the period before your child turns 18 is a lock-out period called the growth period, and the money is inaccessible during this time. The only exceptions to this are if the beneficiary dies, you accidentally contributed above and beyond the $5,000 limit and need to withdraw it, or you roll the Trump Account into an ABLE (Achieving a Better Life Experience) account when your child is 17, which is a tax-advantaged account for people with disabilities.

Once your child turns 18, they can make withdrawals from the account. However, since the Trump Accounts turn into a traditional IRA at that time, tax penalties apply for making withdrawals before the age of 59½, unless your child meets the requirements for a hardship withdrawal.

How are Trump Account withdrawals taxed?

Once your child turns 18 and the account becomes a traditional IRA, taxes on withdrawals depend on a couple of key things: how old your child is and which part of the account the money is coming from.

Any withdrawals your child makes before they are 59½ are generally taxed as regular income and hit with an additional 10% early withdrawal penalty. There are exceptions that avoid the 10% penalty, including a first-time home purchase (up to $10,000), higher education expenses, birth or adoption costs (up to $5,000), disability, and a few others. Withdrawals after 59½ avoid the penalty, but the money is still taxed as regular income, depending on its source.

Unlike most traditional IRA, the money that goes into Trump Accounts for kids isn’t necessarily taxed the same way, because of the way contributions work.

For example, money from individual contributions, like from parents, grandparents, family friends, already went in after tax. That portion isn't taxed again on the way out. However, money from the $1,000 government seed contribution, employer contributions, and all investment earnings hasn't been taxed yet. That portion is taxed as regular income when your child withdraws it.

The account trustee keeps track of how contributions are made and how withdraws are taxed using Form 5498-TA, so your child isn't responsible for figuring out what's taxable.

What happens when my child turns 18?

On January 1 of the year your child turns 18, their Trump Account automatically converts into a standard traditional IRA. The growth period ends, and from that point forward, the account follows the same rules as any other traditional IRA. Here’s what that change means:

• Earned income becomes a requirement: To contribute to a traditional IRA, your child must have taxable earned income, like wages from a job.
• The annual contribution limit changes: Instead of the $5,000 Trump Account limit, the standard IRA contribution limit applies.
• Withdrawals become possible but aren't automatically penalty free: Your child can access the money now, but withdrawals before age 59½ are still generally taxed as income and hit with the standard 10% early withdrawal penalty, unless an exception applies.
• Investment restrictions loosen: The rules requiring the money to stay in low-cost, U.S.-equity-tracking index funds only applied during the growth period. Once 18, your child will have the same investment flexibility as anyone else with a standard IRA.

Does a Trump Account affect your tax return? 

Not really. Since contributions to a Trump Account for kids aren’t tax deductible, and gift contributions rarely meet the reporting threshold for a gift tax return, it has very little impact on your tax return.

Trump Account vs. 529 plan vs. Roth IRA 

All three can help you save for your kid's future, but Trump Accounts, 529 plans and custodial Roth IRAs are built for different goals. Here's how they stack up:

Trump Accounts for kids

• Best for: General long-term savings that isn't tied to a specific purpose.
• Who can contribute: Parents, grandparents, family friends, and employers can all contribute up to $5,000 combined per year (employer contributions are capped at $2,500 and included in that total). Nonprofits and governments can contribute on top of that limit.
• How’s it taxed: Contributions aren't deductible. Growth is tax deferred. Withdrawals are taxed based on the type of contributions made.
• When can your child make withdrawals: Locked until your child turns 18. After that, it becomes a traditional IRA, so early withdrawals before 59½ are generally taxed and penalized unless an exception applies.
• Free money potential: A one-time $1,000 from the government for kids born from 2025 through 2028. Plus charitable organizations can also make contributions

529 plan

• Best for: Education expenses, specifically college, but in many cases, K-12 tuition, as well as other qualified costs.
• Who can contribute: Anyone can contribute, and there’s no federal annual contribution cap to worry about. However, large contributions may trigger the need to file a gift tax return.
• How’s it taxed: Contributions aren't federally deductible, but many states offer a state tax deduction or credit. Growth and withdrawals are completely tax free if the money is used for qualified education expenses.
• When can your child make withdrawals: Withdrawals are allowed anytime for qualified education costs, penalty free. Non-education withdrawals are taxed and hit with a 10% penalty on the earnings portion.
• Bonus flexibility: You can roll over up to $35,000 in unused 529 funds into a Roth IRA for the beneficiary, under certain conditions.

Roth IRA

• Best for: Retirement savings, with more flexibility than a Trump Account.
• Who can contribute: Requires the child to have earned income. A Roth IRA can't be funded with just anyone's gift money the way a Trump Account can.
• How’s it taxed: Contributions are after tax and not deductible. But growth and qualified withdrawals in retirement are completely tax free.
• When can your child make withdrawals: Your child can withdraw contributions (not earnings) anytime, tax and penalty free. That makes a custodial Roth IRA more flexible than a Trump Account, which locks up everything until 18.

Opening a Trump Account for your child can be a great way to jumpstart their savings, but the rules around contributions and withdrawals, and how they’re taxed, can be complicated. Luckily, your local Jackson Hewitt Tax Pro is always here to help. We’re open all year, so find tax services near you to get started.