Trump Accounts

Investor Education

Jun 24

Written By Carriage House Planning, LLC .

With Section 530A Trump Accounts launching on July 4th, we want to provide you with essential information regarding eligibility, rules, tax treatment and some lesser known details about these new savings accounts for minors. Below is a summary of the key details as well as additional reading and resources for your consideration.

What is a Trump Account?

• A new tax-deferred investment account for children under the age of 18. It allows family, friends, employers, governments, and charities to contribute, with earnings growing tax deferred

Eligibility

Child must be under the age of 18 the year the account is established
Child must be a U.S. citizen
Child must have valid SSN
Only one account can be established per child.
The account must be established by a parent or legal guardian.

$1,000 Federal Pilot Contribution

Eligible children born between 2025 and 2028 also qualify for a one-time $1,000 contribution from the U.S. Treasury.

Contributions (Beginning July 4, 2026)

Allowed Contribution Types

Standard contributions from family, friends, or beneficiary
Qualified rollover contributions
Employer contributions
Qualified general contributions from states, governments, or charitable organizations

Contribution Limits

Standard and employer contributions combined is limited to $5,000 annually per account.
Additionally, employer contributions are limited to $2,500 annually per employee, not per child.
Employer contributions will be deductible to the employer and excluded from the employee's taxable income.
The annual contributions limit does not include the $1,000 federal pilot contribution, qualified rollover contributions, or qualified general contributions from states, governments, and charities.
Contribution limits will be indexed for inflation starting after 2027.

Rules and Tax Treatments

Contributions are not tax-deductible, but account earnings grow entirely tax-free until they are distributed. To better understand the rules and tax treatments, we have outlined the two distinct time periods for the accounts below:

First Time Period - Growth Period

Begins when the initial account is established and ends December 31 of year child turns 17.
Early distributions before the child turns 18 are prohibited, except for specific circumstances such as qualified rollover contributions.
“During the growth period, funds in a Trump account may be invested only in eligible investments. An eligible investment, generally, is a mutual fund or exchange traded fund (ETF) that tracks an index of primarily U.S. companies, such as the Standard and Poor’s 500 stock market index, does not use leverage, does not have annual fees and expenses of more than 0.1 percent of the balance of the investment in the fund, and meets other criteria that the Secretary determines appropriate.”

Second Time Period - Post-Growth Period

Begins January 1 of year child turns 18.
Upon turning 18, the child gains full control of the account and may begin making withdrawals.
Account adopts traditional IRA rules, meaning qualified withdrawals (e.g., higher education expenses or first-time home purchase) are penalty-free but taxed at ordinary rates.
Non-qualified withdrawals made before age 59½ are subject to a 10% penalty.
Beneficiaries have the option to convert the account into a Roth IRA.
A qualified rollover contribution transfers a beneficiary's entire Trump Account balance to a new Trump Account held at an eligible brokerage firm. This transfer can only be executed during the account's growth period. You cannot establish a rollover Trump Account after the growth period ends, which occurs the year the beneficiary turns 18.

This summary is based on our current understanding of the rules and administrative procedures. As additional guidance becomes available, implementation details may change.