Trump Accounts are the newest type of minor individual retirement account. They were introduced with the passing of the OBBBA. The program started on July 4th 2026. So, how are they different than 529s, UTMA accounts, or minor IRAs? Let's dive in.
First, what are the qualifications for opening a Trump Account?
Any U.S. citizen under the age of 18 is eligible
U.S. citizens born between January 1, 2025 and December 31, 2028 qualify for a one-time $1,000 Treasury deposit.
You may contribute ever year until the year the child turns 18.
Form 4547 must be filed with the IRS to create the Trump Account.
A legal guardian, adult sibling, or grandparent can manage the Trump Account on behalf of a minor.
Guidelines and Restrictions
Investments are limited to qualifying low-cost U.S. index funds.
Contributions to a Trump Account are capped at $5,000 per year and are not tax deductible.
Employers may elect to contribute to Trump accounts with contributions capped at $2,500 per employee
Distributions generally cannot be made until the year the child turns 18.
Should You Consider A Trump Account?
Trump accounts offer an entry into the investing world for families and minor children. The $1,000 one-time contribution can be a head start for anyone who qualifies, but these accounts come with rules and guidelines. There is a 10% withdrawal penalty before the age of 18. There are no options for tax-free distributions and limited investment options. They are different from other accounts designed for minors such as the 529 and UTMA. Trump accounts are a complement to these accounts not a replacement. If you want to know whether a Trump Account is right for your child or children, please contact your financial professional.