What are Trump Accounts?
Under the One, Big, Beautiful Bill (P.L. 119-21), Trump Accounts are a new kind of traditional IRA designed for children under age 18. These accounts give parents or guardians a tax-advantaged way to save on behalf of eligible children with new contribution rules and a one-time government boost. (irs.gov)
Key Features of the Pilot Program (IRS Proposed Regulations)
The IRS recently issued proposed regulations providing clarity on the pilot program: IR-2026-31, March 6, 2026. (irs.gov)
- $1,000 Government Contribution: The Treasury will make a one-time $1,000 pilot contribution into each Trump Account for eligible children for whom an election is made. Eligible children are U.S. citizens born in 2025, 2026, 2027, or 2028. (irs.gov)
- Contribution Limit: Total annual contributions (from employer and others) cannot exceed $5,000; beginning July 4, 2026, employers may contribute up to $2,500 without counting the contribution as taxable income to the employee. (irs.gov)
- Investment & Growth Period Restrictions: During the initial “growth period” there are limitations—account must invest in eligible ETFs or mutual funds tracking U.S. indices; limited withdrawals are allowed (only rollovers, distributions on death, excess, etc.). (irs.gov)
How to Elect & Apply: What Parents/Guardians Need to Do
- Make the election via Form 4547 (Pilot Account Election) for each eligible child. (irs.gov)
- Ensure child meets eligibility: born 2025-2028, U.S. citizen, has SSN, and no prior election has been made. (irs.gov)
- Decide on investment vehicle in accordance with eligible investment requirements. (irs.gov)
Timeline & Effective Dates
- July 4, 2026: Contributions may begin. Employers may contribute their $2,500 limit starting this date. (irs.gov)
- Pilot elections must occur before December 31, 2028 to receive the $1,000 government contribution. (irs.gov)
- Proposed regulations are open for comment; final rules expected later. (irs.gov)
Practical Example
Maria and José have a child born in 2026. They file Form 4547 to elect the Trump Account pilot for their child. Because their child is eligible, the Treasury will contribute $1,000. They can contribute as parents, and José’s employer can contribute up to $2,500 to the Trump Account without being taxable income to José. They decide their contributions and investments in compliance with the eligible investment rules.
Actionable Tips
- Mark your calendars: eligible contributions and employer options only begin July 4, 2026 and accounts must be established before the end of 2028 for the pilot contribution.
- Educate payroll / HR teams: if your employer may offer employer contributions, plan the program design now.
- Choose low-fee investment options: only specific mutual funds or ETFs are allowed; watch fees and types.
- Track eligibility carefully: once an election is made for a child, there is no second pilot contribution.
By understanding the Trump Accounts pilot rules now, parents and institutions can plan ahead to maximize benefits and avoid pitfalls.