Trump Accounts 2026: How to Claim Your Child's Account and the $1,000 Deposit

The federal tax law enacted on July 4, 2025 (Public Law 119-21) created a new savings account for children, called a Trump Account. Contributions became possible on July 4, 2026, and beginning October 1, 2026, the Treasury Department started automatically enrolling eligible children. If you have children or grandchildren under 18, here is what you need to know, including one step that is easy to miss: the $1,000 government contribution is not automatic.

What a Trump Account is

A Trump Account is a special type of traditional individual retirement account (IRA) set up for a child. Until January 1 of the year the child turns 18 (the IRS calls this the “growth period”), special rules apply:

Investments are limited. The money can be invested only in low-cost mutual funds or exchange-traded funds that track an index of primarily U.S. companies, such as the S&P 500, do not use leverage, and charge annual fees and expenses of no more than 0.1 percent.
No withdrawals. Generally, no money can be taken out during the growth period, apart from limited exceptions such as rollovers and the death of the child.
No tax deduction for contributions, but investment earnings grow tax-deferred.

Once the growth period ends, the account generally follows the ordinary rules for traditional IRAs. Withdrawals are then taxable to the extent they exceed after-tax contributions, and a 10 percent additional tax on early distributions can apply before age 59½ unless an exception applies (the IRS mentions, for example, distributions for higher education expenses or a first-home purchase).

Which children are eligible

For an account: a child with a valid Social Security number who will not turn 18 before the end of the calendar year in which the account is established.
For the $1,000 pilot contribution: a child who is a U.S. citizen, has a valid Social Security number, and was born from January 1, 2025, through December 31, 2028.

Two separate steps: claim the account, then elect the $1,000

Even if Treasury opened an account automatically, the IRS says a parent or other authorized person must still claim and activate it before it can be managed. This is done through the Trump Accounts app (Apple App Store or Google Play), where you verify your identity and your authority over the child’s account.

Claiming the account does not by itself request the $1,000. For an eligible child born from 2025 through 2028, you must also file Form 4547, Trump Account Election(s), and select the pilot program contribution. Form 4547 can be filed at any time, including with your income tax return; the IRS says filing it with your e-filed return is the fastest way. It can also be submitted through the Trump Accounts app, the Trump Accounts website (trumpaccounts.gov), or your IRS Individual Online Account. Have your own identifying information and your child’s legal name, Social Security number and date of birth ready, and make sure they match Social Security Administration records to avoid delays.

How much can go in

$5,000 per year in total from parents, relatives, friends and employers, during the growth period. This amount is scheduled to be adjusted for inflation after 2027.
Employers can contribute up to $2,500 a year for an employee’s child. That amount counts toward the $5,000 total and, for federal purposes, is excluded from the employee’s income. Employers report these contributions on Form W-2 in box 12, code TA.
Not counted toward the $5,000: the $1,000 pilot contribution, qualified general contributions from governments or charities made to a broad class of children, and qualified rollovers.

How it compares with other options

A Trump Account is designed for long-term saving. Because the money generally cannot be used before the year the child turns 18, and after that is treated much like a traditional IRA, it works differently from a 529 college savings plan, which is built specifically for education costs. If education is your main goal, compare the two before adding your own money. For many families the clear win is the free $1,000 for a child born from 2025 through 2028. Whether to add your own money depends on your goals, your other savings, and the investment and withdrawal rules above.

California

California does not follow the federal Trump Account rules, according to the Franchise Tax Board’s summary of the federal law (last updated October 2026). The FTB says the $1,000 federal pilot contribution is not considered income for California purposes, but California does not conform to the federal exclusion for employer contributions. If your employer contributes to your child’s account, that amount may be taxable to you on your California return. California’s treatment of the account’s investment earnings may also differ from the federal treatment, so ask us before relying on federal rules for your state return.

A word of caution

New programs attract scammers. Use only the official Trump Accounts app, trumpaccounts.gov, or IRS.gov, and be wary of calls, texts or e-mails offering to “set up” an account or speed up the $1,000 for a fee.

Sources

If you have questions about whether your child qualifies or how a Trump Account fits with your family’s other savings, please contact the office or call us at (858) 549-1295.

This article provides general information as of October 2026 and is not tax or investment advice for your specific situation. Tax rules change, and the right answer depends on your facts.