Congress just created a government-sponsored investment account for children. Here’s what it means for your family — and what you can do right now.
The recently enacted “One Big, Beautiful Bill Act” introduced a brand-new savings account designed exclusively for children: the Trump Account, also referred to as a 530A. If you have kids under 18 — or are expecting — this is worth understanding now, before the July 2026 launch.
What is a Trump Account?
A Trump Account (officially called a 530A after the section of law that created it) is a government-sponsored savings vehicle modeled as a variation of an Individual Retirement Account under Section 408(a) of the Internal Revenue Code. Think of it as a “starter IRA” for children — with no earned income requirement.
Accounts will be established through the U.S. Treasury and an as-yet-unnamed financial agent. Parents and guardians will be able to track accounts online and through an interactive app Treasury plans to launch alongside the program in July 2026.
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$5,000 Max annual contribution (inflation-indexed from 2028) |
$1,000 Government seed for kids born 2025–2028 |
0.10% Maximum fund expense ratio allowed |
Age 18 When account converts to a traditional IRA |
Who qualifies?
Any U.S. citizen under age 18 with a Social Security number is eligible. A parent or legal guardian can open the account; if no parent or guardian is available, the right passes to an adult sibling or grandparent. Treasury will not auto-enroll children, as doing so would violate taxpayer disclosure rules.
Already have older children?
Kids born before January 1, 2025 are still eligible for a Trump Account — they simply won’t qualify for the $1,000 government seed contribution. Parents can still contribute up to $2,500
pre-tax annually for them.
The $1,000 Pilot Contribution
Children born between January 1, 2025 and December 31, 2028 are eligible for a one-time $1,000 government contribution. The mechanics work like this: filing Form 4547 triggers a $1,000 tax “overpayment” for the child, which is then deposited directly into the Trump Account — not paid out as cash. If no account exists when the election is made, the refund won’t be issued.
Expecting parents may file Form 4547 before the child is born. You can also file it alongside your regular tax return or separately.
How Contributions Work
Contributions are generally made with after-tax dollars and are capped at $5,000 per year (indexed to inflation beginning in 2028). Employers can also contribute up to $2,500 pre-tax per employee. Contributions from governments and charities are excluded from the $5,000 cap. Treasury is still working on guidance regarding the gift tax treatment of contributions.
What Can the Money Be Invested In?
Funds must be invested in U.S. equity index funds that track the stock market. Fund managers are prohibited from charging more than 0.10% in annual fees — keeping costs low by design.
When Can Money Be Withdrawn?
No distributions are permitted until the beneficiary turns 18. At that point, qualifying uses include:
- Paying college tuition
- Starting a business
- Unreimbursed medical expenses
- A down payment on a home
At age 18, the account automatically converts into a traditional IRA, giving it the full flexibility of a retirement account going forward.
The only exceptions to the no-distribution rule before age 18 are rollovers to another Trump Account for the same beneficiary, and ABLE account rollovers for eligible children at age 17.
What Can You Do Right Now?
Contributions cannot be made before July 2026, but families can begin the process today. Filing IRS Form 4547 early will allow parents to receive account-opening instructions in May 2026, ahead of the July launch. Once the account is established through Treasury, families will have the ability to transfer it to a private bank or brokerage of their choice.
LPL is actively engaged.
Our Government Relations team is working directly with Treasury on implementation best practices and coordinating with industry groups like SIFMA on comment letters in response to IRS and Treasury guidance. We will share additional details as they are released.
Questions about Trump Accounts or your family’s financial plan?
Every family’s situation is different. Reach out to discuss whether a Trump Account fits into your broader savings strategy — and what steps make sense for you right now.
This content is provided for informational purposes only and does not constitute tax or legal advice. Guidance from Treasury and the IRS continues to evolve. Consult your tax advisor before making elections or contributions. Securities offered through LPL Financial, Member FINRA/SIPC.