Who qualifies for the new kids' tax-deferred savings accounts?

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What are Trump accounts for kids?

Trump accounts, the new tax-deferred savings and investment accounts for children, are launching in mid-2026. The accounts were created under the One Big Beautiful Bill Act, which was signed into law in 2025.

In December 2025, the IRS issued its initial taxpayer guidance on establishing and managing Trump accounts. The guidance, published as IRS Notice 2025-68, clarifies how account details like contributions, investments, reporting and ownership will be regulated.

Below is an overview of these regulations and their potential impact on your children's long-term finances if you choose to open and invest in Trump accounts for kids.

Who is impacted

Trump accounts for kids are designed to help families save for their children's long-term financial needs, such as retirement, a home or educational expenses.

Who is eligible?

• To be eligible for a Trump account for kids, a child must be born in the US, have a valid Social Security number and be under 18 years old by December 31 of the year the account is opened.
• US children born between January 1, 2025, and December 31, 2028 also qualify for a $1,000 one-time seed contribution offered by the US Treasury.

Who can contribute?

In addition to the initial $1,000 federal government contribution for qualifying children, accounts can receive contributions under IRS Trump account regulations including:

• Employer contributions—up to $2,500 per employee per year, subject to cost-of-living adjustments after 2027
• Contributions from individual states, Indian tribal governments and qualifying organizations such as nonprofits
• Qualified rollover contributions
• Additional contributions from other sources like parents, relatives, family friends or account beneficiaries

Philanthropists are also making large-scale contributions to Trump accounts for kids. For example, Michael and Susan Dell have pledged to donate $250 for up to 25 million children with these accounts across the US.

Aggregate contributions from all sources are capped at $5,000 per child per year. While parents are responsible for establishing accounts for their children, they're not required to contribute to them.

Funds held in Trump accounts for kids must be invested in mutual funds or exchange-traded funds that track an index of primarily American equities. In addition, fees and expenses for these funds must not exceed 1% of the account balance.

What action is required and when

As a parent or guardian, you can establish a Trump account for a child by filing IRS Form 4547 with your 2025 tax return or through the official Trump account website beginning in mid-2026. Trump accounts for kids begin accepting contributions July 4. Accounts are held in each child's name under a parent or guardian's control until the child turns 18.

Once opened, investments in Trump accounts for kids grow tax-deferred until December 31 of the year before the child turns 18. During this growth period, distributions are limited to excess contributions, qualified rollovers or the death of the account beneficiary.

When can funds be used?

Once a child turns 18, their account is generally treated as a traditional IRA and becomes subject to the same rules governing contributions, distributions, taxes and reporting. However, unlike traditional IRAs, Trump accounts for kids may allow penalty-free distributions before age 59 1/2 for certain qualified expenses, including higher education, a first-time home purchase, birth and adoption expenses, or some types of small business expenses.

Who to talk to now

Understanding how Trump accounts for kids work can help you determine whether they fit into your children's long-term financial strategies. As 2026 progresses, additional details about the program will become available.

To discuss how Trump accounts for kids fit into your family's broader financial plans, reach out to a First Citizens Wealth consultant today.