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Every time a new tax law passes, it creates two things: opportunity, and a lot of unanswered questions. Trump Accounts are the newest example. Created by a 2025 federal law, they opened for contributions on July 4, 2026, and they give families a brand-new way to build savings for a child, with the government chipping in the first $1,000 for many of them.
The program is brand new, so some IRS rules are still being finalized, but here's where things stand today and what it could mean for your family.
How a Trump Account Works
A Trump Account works like an IRA, but for your child instead of you. It's opened in their name, and any money in it grows without being taxed year to year. Your child can't touch the funds until adulthood.
As a parent or guardian, you manage the account and choose its investments until your child is old enough to take over.
Who Can Open a Trump Account
To open an account, your child just needs to be under 18 with a Social Security number. That's it.
To get the free $1,000 from the government, your child also needs to:
- Be born between January 1, 2025, and December 31, 2028
- Be a U.S. citizen
- Be your tax dependent
- Not already have this $1,000 claimed by someone else
Missed the birth-date window? Your child can still have an account. It just won't include the automatic $1,000, and there's no downside either way.
Setting The Account Takes About Ten Minutes
You can open an account two ways, and either takes about 5 to 10 minutes.
Through your IRS Online Account: get your child's Social Security number if they don't have one, sign in or create an account and verify your identity through ID.me, then complete Form 4547 online. Keep a driver's license or state ID handy if it's your first time verifying your identity this way.
Through the Trump Accounts app: available at TrumpAccounts.gov , the App Store, or Google Play. It walks you through the same steps and also lets you check your child's balance and set up recurring contributions.
Either way, have this ready:
- Your child's full legal name
- Your child's Social Security number
- Your child's date of birth
- Your child's address
Mark your calendar: the election must be made by December 31 of the year your child turns 17.
How the Money Is Invested
The money doesn't sit in cash. By law, it goes into low-cost index funds tracking the S&P 500 or a similarly broad market index. There's no individual stock picking, and the options are intentionally limited.
Contributions
Family, friends, and employers can add up to $5,000 per child each year. The federal $1,000 deposit doesn't count against that limit. Employer contributions (up to $2,500 a year) do count toward it.
Contributions must happen within the calendar year, there's no making them up afterward. And while your child is a minor, they aren't tax deductible.
How It's Taxed
While your child is under 18: you won't get a tax form for the account's earnings, and you don't report anything on your return. The money stays locked in, aside from a few narrow exceptions, like transferring to a similar account or in the event of the child's death.
Once your child turns 18: the account behaves like a traditional IRA. Withdrawals before 59½ can trigger a 10% penalty, though common exceptions apply, like a first home or college costs. Money you personally contributed comes out tax-free, since it was already taxed. The $1,000 federal deposit, employer contributions, and investment growth are all taxed as regular income when withdrawn.
State Taxes and Turning 18
Everything above covers federal taxes only. States may treat this differently, and guidance isn't out yet for every state, so check with your CPA about your own return.
Nothing changes automatically the moment your child turns 18, unless the original paperwork included a provision to convert the account into a traditional IRA. Contributions can continue after that too, following ordinary adult IRA rules, though someone else can still write the check.
Where the Money Is Held
The Treasury selects the bank or IRS-approved custodian for these accounts. No specific brokerage has been named yet. Once your election is processed, you'll get instructions for managing the account through your IRS Online Account or the Trump Accounts app.
Where This Leaves You
Opening a Trump Account may be a straightforward first step. There is no cost, and the potential $1,000 contribution gives your child money that can begin growing right away.
The more important decision is what comes next: how much to contribute, whether the account should sit alongside a 529 plan, and how it fits into the rest of your family’s financial picture.
At Dark Horse CPAs, we can help you look at the account in context and decide whether it belongs in the plan you already have for your children.
About Dark Horse CPAs
Dark Horse CPAs provides an integrated suite of services including tax , accounting , fractional CFO , and wealth management to small businesses and individuals across the U.S. The firm was established to transform the client experience by offering personalized, high-quality services that small businesses and individuals deserve. As Dark Horses in their industries, these businesses benefit from advanced tax strategies and accounting insights typically reserved for larger companies. With a nationwide presence and a team of dedicated professionals, Dark Horse CPAs is committed to your success. Get a quote today.
