A retirement-style account for a child
A Trump Account is a new kind of individual retirement account for someone under 18, created by the 2025 tax law in section 530A of the tax code. The IRS describes it as broadly following the rules for traditional IRAs, with special rules that apply while the child is young. The child owns the account; a parent or other adult makes decisions for it until the child is an adult.
The growth period
Most of the special rules apply during what the IRS calls the growth period, which ends on December 31 of the year before the child turns 18. The IRS gives an example: a child born October 1, 2025 turns 18 on October 1, 2043, so the growth period ends on December 31, 2042. During that time the money can only be invested in certain funds, withdrawals are generally not allowed, and contributions have their own yearly limit.
Where the money comes from
Contributions cannot be made before July 4, 2026. After that, money can come from several places.
- A one-time $1,000 federal pilot contribution for eligible children born 2025 through 2028.
- Family, friends or the child, up to $5,000 a year in total together with employer money.
- An employer, up to $2,500 a year without counting as the employee's income.
- States, local governments, tribes and charities, through what the IRS calls qualified general contributions.
What happens at 18
From January 1 of the year the child turns 18, the account generally follows traditional IRA rules. Withdrawals become possible, but earnings and money that was never taxed are taxed as income, and a 10% additional tax can apply before age 59½ unless an exception such as higher education or a first home applies. The money can also stay invested for retirement.
Where to start
The IRS says the election to open an account can be made on Form 4547 or online at trumpaccounts.gov. Before you contribute, decide whether this account fits next to other goals such as a college fund; the comparison calculator on this site can help.
Sources and further reading
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