Trump Account taxes and withdrawals at 18

No withdrawals before the end of the growth period

During the growth period, IRS Notice 2025-68 allows no distributions except a few special cases: rollovers to another Trump Account or an ABLE account, removing an excess contribution, and payments after the child's death. In practice, the money stays invested until January 1 of the year the child turns 18.

What is taxed and what is not

Contributions are not counted as the child's income when they go in. Money that family members contribute creates basis, so it comes back tax free later. Money that never created basis, meaning the pilot contribution, employer contributions, charity or government deposits and all investment growth, is taxed as ordinary income when withdrawn.

The 10% additional tax

After the growth period, the account follows traditional IRA rules, including the 10% additional tax on distributions before age 59½. The IRS lists exceptions for IRAs that include qualified higher education expenses, up to $10,000 for a first home, and some other situations. Ordinary income tax still applies in those cases; only the extra 10% is avoided.

Keeping it invested

Nothing requires the money to come out at 18. The account can stay invested and be treated like a traditional IRA, and it may later be rolled over to another IRA. For many young adults with little income, leaving it alone and continuing to save is the cheapest option.

Records to keep now

Keep a yearly record of who contributed and how much, especially family contributions, because that basis is what comes back tax free. Account statements should report basis, but your own notes help if anything is unclear years later.

• Family contributions by year.
• Employer, pilot and charity deposits, kept separate.
• Copies of Form 4547 or the online election confirmation.