The $1,000 Question: What Families Need to Know About Trump Accounts
A new tax-advantaged savings account for children became available on July 4, 2026, created under Section 530A of the One Big Beautiful Bill Act (OBBBA). The “Trump Account” gives every eligible U.S. child a head start on long-term savings, which is funded by a mix of federal seed money, private philanthropy, employer matches, and family contributions. Here is what matters most as you decide whether, and how, to use one.
Who Qualifies, and How Accounts Are Opened
Any U.S. citizen under age 18 with a Social Security number is eligible, and each child may hold one account. A legal guardian, parent, adult sibling, or grandparent, in that priority order, can open the account by filing IRS Form 4547, either on its own or attached to a federal tax return. The child is the account owner and beneficiary; a parent or guardian manages it until age 18. Accounts are activated and managed through the official Trump Accounts app (available on iOS and Android, or at trumpaccounts.gov), which is also where families can set up recurring contributions.
Where the Accounts Are Held
The U.S. Treasury designated Bank of New York Mellon (BNY) as financial agent for the program, and BNY in turn selected Robinhood Securities, LLC as the initial trustee and broker-dealer. In practice, Robinhood Securities holds and administers account assets in a fiduciary capacity on Treasury's behalf, and the funds sit in a default low-cost, broad-based index fund unless the family chooses otherwise. Families interact with the program only through the Trump Accounts app or trumpaccounts.gov; there is no ability to choose a different custodian at this stage, and no Robinhood branding appears in the client-facing experience.
The Federal Seed Deposit
Children born between January 1, 2025, and December 31, 2028, receive a one-time $1,000 deposit from the U.S. Treasury once an account is opened on their behalf. This is the foundational deposit the program is best known for, and it requires no action beyond opening the account and filing the election.
The Dell Foundation ZIP Code Match
Separate from the federal deposit, Michael and Susan Dell have committed $6.25 billion to fund $250 contributions for children up to age 10, including those born between 2016 and 2024, who are not eligible for the federal $1,000 but live in a ZIP code where median household income falls at or below $150,000. This grant is expected to reach roughly 25 million children nationwide and, notably, does not count against the account's annual contribution limit. Eligibility is verified automatically once an account is open and can be confirmed at trumpaccounts.gov or in the official app. Our recommendation is to steer clear of third-party “ZIP checker” sites, which are not affiliated with the U.S. Treasury.
Employer and Other Private Matches
A growing list of employers, including several large banks, asset managers, and other national companies have pledged to match the federal $1,000 deposit for their own employees' eligible children. Separately, employers may contribute up to $2,500 per year to an employee's Trump Account on a tax-free basis, outside of the one-time matches. A handful of other philanthropic pledges (some tied to specific states) have followed the Dell Foundation's lead, so it is worth asking an employer directly whether a matching program is in place.
Contribution Limits and Tax Treatment
- Annual cap: $5,000 per child for 2026 and 2027, from all individual sources combined (parents, grandparents, other relatives, friends); indexed for inflation in $100 increments starting in 2028.
- Deductibility: Contributions are not tax-deductible to the person making them.
- Tax Deferred Growth: Invested assets grow tax-deferred, with no tax due on gains or dividends until withdrawal.
- Withdrawals: Qualified Distributions are taxed as ordinary income, to the extent they exceed the account contributions aka basis. Each dollar withdrawn is treated as a proportional mix of basis and growth. The account converts to a traditional IRA at age 18, and the standard 10% IRA penalty rules apply until age 59 ½, unless the withdrawal purpose is one on the IRA exception list. Robinhood Securities, LLC will track and report the withdrawals on Form 1099 for tax purposes. Withdrawals are permitted for any purpose beginning January 1 of the year when the child turns 18.
How It Differs from a 529 Plan or Roth IRA
Unlike a 529 plan, Trump Account withdrawals are not restricted solely to education expenses and can be used before age 59 ½ if they fall under the IRA exception list. Unlike a Roth IRA, a child does not need earned income to receive contributions. The tradeoff is tax treatment on the way out: distributions are taxed as ordinary income, more akin to a traditional IRA than a Roth.
What to Do Next
If you have an eligible child, opening the account and filing Form 4547 is the first step toward capturing the federal deposit. If you live in a lower-income ZIP code, it is worth confirming eligibility for the Dell Foundation grant. And if your employer has not yet announced a matching program, it may be worth asking; the list of participating employers continues to grow.
A Trump Account is one piece of the puzzle. We're happy to help you think through how a Trump Account, a 529 plan, and the broader planning for your family fits together. Please reach out with any questions, or to schedule time to talk through planning for your family’s future.
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