TRUMP Accounts: New savings opportunities

On July 4, 2026, TRUMP Accounts (also known as 530A accounts, as approved under the One Big Beautiful Bill Act of 2025) became available, creating a new opportunity for individuals to establish tax-advantaged savings accounts for their minor-aged children that can be funded by a variety of parties, including employers, to help enhance the opportunities for investing in our children’s future. The IRS and Department of the Treasury released the first proposed regulations for TRUMP Accounts, but further questions remain. We’re covering the new rules, how they may affect your family and your business, and what steps you should consider taking now.

What are TRUMP Accounts?

TRUMP Accounts are tax-deferred savings accounts that are available to any child under 18 with a valid Social Security number. Contributions can be made until December 31 of the year the child turns 17 years of age, and then when the child reaches age 18, the account ceases the funding stage. Then it functions and operates much like a traditional individual retirement account, including the deferral of taxation of all monies held in the account until distributed (using the same rules for taxable distributions, rollovers and early withdrawal penalties before age 59 ½).

To have a qualifying TRUMP Account:

• There can be only one account being funded per child (and must be for the benefit of only that child) at a time
• The account agreement must clearly be designated as a TRUMP Account (not a converted IRA)
• The account can only use a bank or IRS-approved trustee
• Investments must be limited to approved mutual fund options until age 18
• All funds must be separate from other assets
• Withdrawals are restricted until age 18 (with limited exceptions)
• Rollovers must be made of the full account balance

Annual contribution limits and who can contribute

Anyone can contribute to a TRUMP Account — parents, grandparents, other family, friends — but all contributions must go the same TRUMP account with a combined annual limit of $5,000 per child (indexed for inflation). The US Government is also authorized to make contributions, as are qualifying charitable organizations, although all such contributions must go through the Treasury and be distributed equally among eligible children.

Employer contributions

Employers have two avenues to assist employees in making contributions to TRUMP accounts belonging to an employee’s children. The employer can establish a written plan (with provisions intended to be similar to a dependent care assistance program, such as with eligibility and nondiscrimination) whereby they can make deductible contributions of up to $2,500 per qualifying employee (not per child). Provided the employee has established a qualifying TRUMP account, employer contributions are excluded from the employee’s income but count toward the annual $5,000 cap. Alternatively, the employer can establish or amend its Section 125 “cafeteria” plan to enable the employee to contribute up to $2,500 (total, in aggregate, not per child) on a pre-tax basis to his or her child(ren)’s TRUMP account, and again still subject to the annual $5,000 maximum limit.

The good news is that the Department of Labor has recently confirmed that employer contribution to TRUMP Account programs will not generally be treated as an ERISA-covered plan for providing benefits to the dependents of employees. As such, employers can either sponsor a TRUMP Account plan or allow contributions to be made through a Section 125 plan and still avoid the added compliance obligations that come with ERISA-covered plans.

Federal government pilot contributions

To further encourage early savings, the U.S. Government will make a one-time $1,000 contribution to the TRUMP Account of each eligible child born at any time between 2025 through 2028. These amounts are not subject to the $5,000 annual contribution limit.

Eligibility for the $1,000 government contribution is stricter than for opening a regular TRUMP Account. The child must be a “qualifying child” for tax purposes (generally meaning the child lives with the taxpayer and is claimed as a dependent), a U.S. citizen and have a Social Security number issued before the TRUMP Account election is made. Adopted children born abroad may face delays due to citizenship and SSN requirements. Because the rules for who can open an account and who can claim the $1,000 may differ, families who have adopted a child should confirm no prior election has been made for the child prior to attempting to establish an account to claim the government contribution.

Now that TRUMP Accounts have launched, the funds are expected to be deposited into a qualifying child’s account as soon as possible after the initial TRUMP account election and account opening. The deposit is tax-free and protected from IRS levy or offsets.

Who can open a TRUMP Account?

Children cannot open their own accounts. An “authorized individual” must open the account on the child’s behalf. The proposed rules establish a priority order for who qualifies:

• In general, priority for establishing a TRUMP Account begins with the parent(s), legal guardian, adult sibling, then grandparent. If two people share the same priority (e.g., both parents), either one may file, as long as no account has already been opened for the child.
• If the $1,000 government contribution is being claimed, the authorized individual is the person making that election — typically the parent or guardian who claims the child as a qualifying dependent.

The authorized individual becomes the “responsible party,” meaning the person with legal authority over the account (including investment choices, rollovers and naming a successor) until the child reaches adulthood, unless state law or the account agreement provides otherwise.

How to open a TRUMP Account

Simply visit www.trumpaccounts.gov to learn more about setting up a TRUMP Account, including instructions on downloading the software app and accessing IRS Form 4547 for initial enrollment, which can be either completed online or can be printed and mailed to the IRS as instructed. You have until Dec. 31 of the year your child turns 17 to open an account using IRS Form 45347 in either format. Only the first valid application per child is accepted, so coordinate with family members to avoid duplicates.

What's still unknown?

Many significant issues remain unresolved, including:

• Rules for contributions, distributions and reporting during the initial growth period of a child prior to reaching age 18
• The procedures and requirements for making employer contributions and pre-tax payroll deductions
• How government and charity contributions will be administered and coordinated with other contributions
• Gift and transfer tax implications for contributors (including whether contributions are considered gifts of a present or future interest)
• Procedures for handling duplicate accounts, excess contributions and multiple elections for the $1,000 pilot program
• Whether states or additional types of institutions may be authorized to open or manage accounts on behalf of children

The TrueNorth team continues to closely watch for all updates and further guidance related to the initial roll-out of TRUMP accounts and related issues.

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Content sponsored by Sandberg Phoenix law firm. This update is not intended to be exhaustive, nor should any discussion or opinions be construed as legal, tax or financial advice. TrueNorth Companies recommends consulting with legal, tax or benefits professionals before making any decisions related to employee benefit plans.