The Trump administration has launched Trump Accounts, a tax-advantaged investment account specifically for children under 18 designed to facilitate “long-term financial security.”
“The American Dream belongs to every child, and today we are equipping the next generation to claim their rightful share,” Treasury Secretary Scott Bessent affirmed during an Oval Office ceremony for the program.
Through Trump Accounts, our president is creating an ownership economy where all citizens become shareholders,” Secretary Bessent added right before President Trump rang the New York Stock Exchange and Nasdaq’s opening bell in the White House.
How Does It Work?
The tax-deferred accounts allow for contributions of up to $5,000 after-tax dollars annually, much like a Roth Individual Retirement Account (IRA).
Families, Friends, and Employers of a child’s guardian can contribute to the account.
Once the child begins earning income, they may also be able to contribute to their account.
These contributions will be strictly invested in low-cost U.S. equity index funds or exchange-traded funds (ETFs) while the child is under 18.
This decision, according to the program’s website, ensures long-term growth is maximized while adverse risk is minimized.
Once the child becomes an adult, the account will transition into a traditional IRA.
How To Open An Account
The child’s investment account can be opened on their behalf by a legal guardian, a parent, an adult sibling, or a grandparent.
To open an account, eligible persons can do so via Internal Revenue Service (IRS) Form 4547 through the program’s mobile app, when they file their taxes, or through the IRS’s Individual Online Accounts (IOLA) website.
Users can manage, track, and open their accounts through TrumpAccount.com or through the program’s mobile app.
Funds are accessible without penalty once the child becomes an adult. The funds may be used for qualified expenses such as educational needs or a first home purchase.
One-time $1,000 For Eligible Individuals
Children born between January 1, 2025, and December 31, 2028, may also qualify for a one-time $1,000 contribution from the U.S. Department of the Treasury.
The contribution must be made through an eligible adult’s election for the child to receive it.
