Tax Planning

How Trump Accounts Work: A New Savings Tool for Eligible Children

Exploring the ins and outs of the proposed regulations for Trump Accounts, including who qualifies, how to open one, and what families need to do before the deadline.

By NomadicTax Research Team • 5-8 min read • April 4, 2026

## Introduction Under the **One, Big, Beautiful Bill** (Public Law 119-21), the U.S. tax code rolled out a new concept: **Trump Accounts**, a special type of retirement-style account established for eligible children. With proposed regulations released, it’s essential for parents, guardians, and tax professionals to understand how these accounts work and how to take advantage of early benefits—like a **one-time $1,000 pilot contribution** from the Treasury. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-for-trump-accounts-pilot-program-treasury-department-to-deposit-1000-into-the-account-of-each-eligible-child?utm_source=openai)) ## Eligibility: Who Can Get One? - The child must be born in **2025, 2026, 2027, or 2028**. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-for-trump-accounts-pilot-program-treasury-department-to-deposit-1000-into-the-account-of-each-eligible-child?utm_source=openai)) - Must be a **U.S. citizen** with a **Social Security number** issued. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-for-trump-accounts-pilot-program-treasury-department-to-deposit-1000-into-the-account-of-each-eligible-child?utm_source=openai)) - No previous pilot program election may have been made for that child. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-for-trump-accounts-pilot-program-treasury-department-to-deposit-1000-into-the-account-of-each-eligible-child?utm_source=openai)) ## How to Establish One: Steps & Forms - An **authorized individual**—often a parent or legal guardian—must file an election to open an initial Trump Account using **Form 4547, Trump Account Election(s)**. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-for-trump-accounts-pilot-program-treasury-department-to-deposit-1000-into-the-account-of-each-eligible-child?utm_source=openai)) - The election must occur **on or before December 31 of the year the eligible child turns 17**. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-how-to-open-initial-trump-accounts-under-the-one-big-beautiful-bill?utm_source=openai)) - Concurrently, the election may include the request to receive the **$1,000 pilot contribution** from Treasury—this is part of section 6434. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-for-trump-accounts-pilot-program-treasury-department-to-deposit-1000-into-the-account-of-each-eligible-child?utm_source=openai)) ## Roles & Responsibilities - The individual making the account election becomes the **responsible party**: handling investments, rollovers, and account management until the child has legal capacity. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-how-to-open-initial-trump-accounts-under-the-one-big-beautiful-bill?utm_source=openai)) - If no pilot program election is made, priority for who can make the election follows a tiered structure: **legal guardian → parent → adult sibling → grandparent**. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai)) ## Key Deadlines & Important Dates - Proposed regulations became available March 6, 2026. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-how-to-open-initial-trump-accounts-under-the-one-big-beautiful-bill?utm_source=openai)) - Public comments on these regulations are open through **May 8, 2026**. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai)) - Rule-applicability: for **taxable years beginning on or after January 1, 2026**. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai)) ## What Makes Trump Accounts Different - Formal IRS rules §530A create **special rules** during a “growth period” for contributions, investments, distributions, and reporting. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai)) - After the child turns 18 (growth period ends December 31 of the year they turn 17), most rules will revert to standard traditional IRA rules. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai)) - Annual contribution limit is **$5,000**, adjusted for inflation after tax year 2027. Employer contributions (up to $2,500) are excluded from income under section 128. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai)) ## Action Steps for Families & Tax Professionals - File **Form 4547** for each eligible child. Be sure to include the pilot contribution if desired. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-for-trump-accounts-pilot-program-treasury-department-to-deposit-1000-into-the-account-of-each-eligible-child?utm_source=openai)) - Keep records of eligibility: birth date, SSN, citizenship status. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-for-trump-accounts-pilot-program-treasury-department-to-deposit-1000-into-the-account-of-each-eligible-child?utm_source=openai)) - Monitor upcoming guidance for rules on **investments**, **distribution restrictions**, and **reporting requirements**, which are still *reserved sections* in proposed regulations. ([irs.gov](https://www.irs.gov/irb/2026-13_IRB?utm_source=openai)) ## Example Scenario *Family A has a child born in August 2026. The parents want to open a Trump Account with the pilot program contribution.* - Before **December 31, 2026**, a parent files **Form 4547**, electing both the Trump Account and the $1,000 pilot contribution. - The parent becomes the **responsible party** and manages the investments until the child has legal capacity. - Once the child turns 18 (i.e. growth period ends year they turn 17), the account transitions to traditional IRA rules. ## Conclusion Trump Accounts represent a major new **pro-family retirement saving tool** under the One, Big, Beautiful Bill. While still in proposed regulation stage, understanding eligibility, elections, and deadlines now ensures families can benefit—especially the one-time government seed money. With public comments open until May 8, 2026, your input matters.