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A Trump Account is a new kind of individual retirement account for children, created by the law enacted on July 4, 2025, and it comes with a one-time $1,000 deposit from the Treasury for some newborns. The rules are specific, though: who qualifies for the $1,000, how a parent claims the account, how much family and employers can add, and when the money can come out. Below is what the IRS and other published guidance say, plus our own arithmetic on what regular contributions could grow to under assumed returns.
What is a Trump Account?
According to the IRS’s Trump Accounts FAQ, which was last updated on October 21, 2026, a Trump Account is “a new type of individual retirement account (IRA) for eligible children.” A child qualifies with a valid Social Security number, provided the child will not turn 18 before the end of the calendar year in which the account is established. The Bank of New York Mellon is the financial agent, and Robinhood Securities LLC is the brokerage provider and initial trustee.
The account is not a savings account, and it is not insured like one. It holds investments, so its value can fall as well as rise. For cash you may need within a few years, a federally insured account is still the better fit, and our best high-yield savings accounts guide covers those.
Who gets the $1,000 pilot deposit?
Under the proposed regulations the IRS announced on March 6, 2026, Treasury will make a one-time $1,000 pilot contribution to each eligible child with a valid election. The child must be a U.S. citizen with a Social Security number and must have been born in 2025, 2026, 2027 or 2028, and no earlier pilot election for that child can have been processed. The person who elects is generally a parent or guardian who expects to treat the child as their qualifying child for the year.
Two details are easy to miss. The $1,000 is separate from the account itself, so a family has to opt in to it, and the rules in that announcement were still proposed regulations, not final ones, at the time of publication.
How to claim a Trump Account, step by step
The IRS FAQ says you request the account, the pilot contribution or both on Form 4547, which can be submitted through the Trump Accounts app or website or through your IRS Individual Online Account. Starting October 1, 2026, the Treasury Secretary began automatically enrolling some children, and those children do not need Form 4547 to have an account opened. They still must be claimed and activated, and the $1,000 election is a separate step.
| Situation | What the IRS says to do |
|---|---|
| Child has no account yet | Submit Form 4547 to establish one |
| Child born 2025 to 2028 and you want the $1,000 | Submit Form 4547 and select the pilot contribution option |
| Child was auto-enrolled by Treasury | No Form 4547 needed to open the account; claim and activate it, and elect the $1,000 separately |
| You made a mistake on Form 4547 | Do not file Form 1040-X; follow the CP318 notice or call 866-USA-4547 |
How much can go into a Trump Account?
Contribution limits come from IRS guidance. A summary of Notice 2025-68 from the Slott Report puts the individual limit at $5,000 per year, indexed for inflation starting in 2028, and the employer limit at $2,500 per employee. Employer money counts toward the $5,000, but the Treasury’s $1,000 and contributions from tax-exempt organizations do not. Empower’s guide adds that the $2,500 employer amount can be split among an employee’s eligible children.
What the money is invested in
Per Empower’s summary, contributions start in the State Street SPDR Portfolio S&P 500 ETF, with fees capped at 0.1%, and during the growth period the funds must stay in a diversified index fund of U.S. stocks. Treasury plans to add more index fund options later. Because everything is in stocks, the balance will swing with the market, which matters if a family is thinking about the account as a guaranteed pot of money. It is not one.
When can the money come out?
Withdrawals are restricted until the child turns 18. After that, according to the Slott Report, traditional IRA rules apply starting in the year the child turns 18, and the funds can be converted to a Roth IRA from that year. Before age 59½, Empower says, withdrawals are generally subject to income tax and a 10% penalty unless an exception applies.
| Exception to the 10% penalty (per Empower) | Limit |
|---|---|
| First home | Up to $10,000 |
| Birth or adoption | Up to $5,000 per child |
| Emergency expense | Up to $1,000 per year |
| Higher education and qualifying medical expenses | Rules apply |
As a rough guide to the stakes, the penalty on a $10,000 early withdrawal that does not qualify is $1,000, on top of any income tax owed on the taxable portion.
What could a Trump Account grow to? An illustration
The figures below are our own arithmetic, not a forecast. We assumed constant annual returns of 4% and 7% over 18 years, contributions at the end of each period, no fees and no taxes, and a flat $5,000 limit even though the real limit is indexed from 2028.
| Scenario (18 years) | Total contributed | At 4% a year | At 7% a year |
|---|---|---|---|
| $1,000 pilot deposit only | $1,000 | $2,025.82 | $3,379.93 |
| $1,000 plus $50 a month | $11,800 | $17,805.44 | $24,915.98 |
| $1,000 plus $5,000 a year | $91,000 | $130,252.88 | $173,375.09 |
The $1,000 alone grows to between about $2,026 and $3,380 under these assumptions, so the account does not become a college fund unless a family keeps adding to it. Real stock returns are not smooth, and the actual outcome could land above or below either column. For families with no emergency cushion yet, our guide to building an emergency fund is the better first step, and current rate conditions are in our look at savings rates after the Fed hike.
Editor’s Take
The $1,000 is the easiest decision here: if your child was born from 2025 through 2028 and is a U.S. citizen with a Social Security number, claiming it costs a form and some patience. Whether to add your own money is a different question. A Trump Account locks the money in stocks and restricts it until 18, so it suits long-horizon savings, not a safety net. Read the IRS FAQ yourself before you submit anything, because parts of the program are still governed by proposed rules.
This is general information, not tax, legal or financial advice. Check the IRS Trump Accounts guidance for the latest rules before you file.
