Trump Accounts (530A)

• Created to build long-term financial security for American children from birth, connecting Main Street families to the financial markets.
• Every child under 18 with a Social Security number is eligible — not just newborns.
• Children born between Jan 1, 2025 and Dec 31, 2028 receive a free $1,000 seed contribution from the U.S. Treasury.
• Families, employers, charities, and state governments can contribute up to $5,000/year.
• Funds grow tax-deferred in low-cost U.S. stock index funds — no annual tax on dividends or gains.
• Completely locked until age 18 — no withdrawals for any reason (except trustee-to-trustee rollovers or death).
• At age 18, the account converts to a traditional IRA. Withdrawals before age 59½ are subject to income tax plus a 10% early withdrawal penalty, with certain exceptions (education, first-time home purchase, disability, etc.).
• Unlike a 529 plan, there is no education requirement — but unlike a UTMA, money is not freely accessible and is treated as a retirement vehicle.
• Tax treatment is deferred, not tax-free: growth is not taxed annually, but withdrawals are taxed as ordinary income (unlike a Roth IRA or 529).
• Accounts launch July 4, 2026. File IRS Form 4547 now to enroll and claim the $1,000 seed for eligible children.

• Available for any U.S. child under age 18 with a valid Social Security number.
• The $1,000 government seed contribution is limited to U.S. citizens born between Jan 1, 2025 and Dec 31, 2028.
• The account must be elected by an authorized adult (parent, guardian, adult sibling, or grandparent — in that priority order).
• Election is made using IRS Form 4547 – Trump Account Election.
• Election must generally occur before the year the child turns 18.

• $1,000 one-time contribution from the U.S. Treasury for eligible births (2025–2028).
• Does not count toward the $5,000 annual contribution limit.
• Deposit is made after a valid election is filed; accounts go live July 4, 2026.
• Funds are immediately invested in a qualified U.S. equity index fund.
• Additional charitable contributions may be available: the Michael & Susan Dell Foundation pledged $250 for up to 25 million lower-income children age 10 and under.

• Annual contribution limit: up to $5,000 per year (indexed to inflation starting 2028).
• Contributions may come from:
  • Parents or family members
  • Employers (up to $2,500/year pre-tax, counts toward the $5,000 limit)
  • Charitable organizations (does not count toward the $5,000 limit)
  • State and local governments (does not count toward the $5,000 limit)
• Contributions are made on an after-tax basis and are not tax-deductible.
• No earned income requirement — unlike a Roth or traditional IRA, a child does not need to have a job to receive contributions.
• Contributions cannot begin until July 4, 2026.

• Accounts must invest in broad-based U.S. stock index funds or ETFs.
• Funds must track a qualified U.S. equity index, use no leverage, and have annual expenses of 0.10% or less.
• No bonds, international funds, individual stocks, or actively managed funds permitted during the growth period (under age 18).
• Intended to provide long-term, diversified exposure to the U.S. equity market.

• Tax-deferred growth: no annual tax on dividends or capital gains while funds remain in the account.
• Important distinction: this is tax-deferred, not tax-free. Unlike a Roth IRA or 529 plan, withdrawals will be taxed.
• After-tax contributions (the $5,000/year from families) are returned tax-free as basis upon withdrawal.
• Pre-tax amounts — including the $1,000 government seed, employer contributions, and all investment earnings — are taxed as ordinary income when withdrawn.

• No withdrawals allowed before age 18, for any reason.
• The only exceptions during childhood: trustee-to-trustee rollovers to another Trump Account, certain rollovers to an ABLE account (year child turns 17), or distribution upon death.
• At age 18, the account converts to a traditional IRA. The child gains full control.
• After age 18, funds may be used for any purpose, but standard IRA withdrawal rules apply.

Withdrawals before age 59½ are generally subject to:

• Ordinary income tax on the taxable portion, plus
• A 10% early withdrawal penalty

Penalty may be waived for:

• Qualified higher-education expenses
• First-time home purchase (up to $10,000)
• Disability
• Certain medical expenses
• Death of the account holder

Note: Income tax still applies to taxable amounts even when the penalty is waived.

A 529 offers tax-free (not just deferred) growth for education, better FAFSA treatment, and parent retains control. Trump Accounts have no education requirement but are locked longer and taxed on withdrawal.

A UTMA gives the child unrestricted access at 18 and full investment flexibility, but growth is taxed annually and it counts heavily against financial aid. Trump Accounts are more restrictive but tax-advantaged.

A Roth IRA offers tax-free growth and withdrawals, but requires earned income. Trump Accounts require no earned income and include a free $1,000, but withdrawals are taxable.

Trump Accounts function like a traditional IRA for minors, but contributions don't require earned income and are capped at $5,000 (not the standard IRA limit).