Trump accounts start in 2026

Trump accounts can be set up for children under age 18 who have a Social Security number. Beginning July 4, 2026, up to $5,000 can be contributed to the account each year. The government will also put in $1,000 for each kid born in 2025-28. Most contributions are not deductible. Payouts cannot be taken while the beneficiary is under 18. After that, distributions are taxed in a manner akin to rules that apply to traditional IRA payouts.

Parents must elect to open a Trump account. The Treasury Department will create an account for the child, which the parents will then be able to activate and open. To opt in, parents either file new Form 4547 or sign up through an online government portal. The Service has only released a draft Form 4547, and the portal will not be ready until mid-2026.

Three more important points about contributions to Trump accounts: They are not taxable to the beneficiary. Qualified general contributions, payins by employers and the $1,000 payin by the U.S. do not create basis in the accounts. Plus, contributions to Trump accounts cannot be made before July 4, 2026.

Trump account funds can be invested only in certain stock mutual funds or exchange-traded funds that track an index of primarily U.S. companies, such as Standard & Poor’s 500-stock index, until the beneficiary reaches 18.

Distributions generally cannot be taken while the beneficiary is younger than 18. Starting in the year the beneficiary turns 18, any distributions are taxed in a manner similar to rules that apply to withdrawals from traditional IRAs.

Credit to Joy Taylor from Kiplinger.com