Trump Accounts Explained: How to Open One & Get the $1,000 Federal Deposit

In early December, The White House released more details on the Trump Accounts, giving parents a clearer picture of how the federal investment accounts for kids will work.

The program originally focused on babies born during Trump’s second term, but with new updates (including a major private donation), the scope has expanded. The program now covers both newborns and older children, though the benefits differ depending on age and family income. 

Below, we break down who qualifies, how these accounts will be opened, and what they might mean for your child’s financial future.

What Are the Trump Accounts?

Trump Accounts are federally sponsored investment accounts created to help all American children under 18 build long-term financial security. Families can contribute to these accounts at any time—much like a savings or retirement account—with the goal of giving kids a stronger financial foundation as they grow up. Parents can make contributions themselves, and employers can contribute as well, offering another way to help boost a child’s future savings.

The program was first introduced with the passage of the One Big Beautiful Bill Act in July 2025. Under the original legislation, eligible newborns receive a one-time $1,000 seed contribution from the U.S. Treasury to start their account.

In early December 2025, philanthropists Michael and Susan Dell pledged $6.25 billion to expand the program so that younger children—particularly kids under 10 who weren’t eligible for the newborn deposit—could receive their own accounts, too. As a result, older children may now qualify for a $250 seed contribution, depending on family income and ZIP-code–based criteria.

More details about eligibility, contributions, and how the accounts will open are expected as Treasury guidance continues to roll out, but here’s what we know so far.

How to Open a Trump Account

Now that the White House has released more detailed information for opening a Trump account, here’s what to know and how to claim your child’s once the program officially rolls out. 

According to the IRS, parents can file Form 4547 (a new form that's being developed for this program) to both open the initial account and to make later contributions.

Step 1: Fill out IRS form 4547

Parents will use this form to:

• Establish a Trump account for an eligible newborn and receive the $1,000 contribution

• Open a Trump account for any eligible child under the age of 18

• Add contributions to the Trump account

Step 2: Wait for Treasury instructions

After you file the form and beginning in May 2026, the Treasury will send instructions to activate the account. You’ll verify your identity and complete the final steps to open your child’s Trump Account.

When can you file the form?

There are a few different options regarding when you can file, including:

• Anytime, once the program officially launches

• Along with your 2025 tax return

• Online at trumpaccounts.gov beginning mid-2026. This is estimated sometime between June-August 2026. An official date hasn’t been announced but you can sign up for updates on the website, too.

Who Qualifies For the Free Seed Money?

All children under the age of 18 are eligible to open a Trump Account—the difference is in whether they’ll get the seed money. When the program was first announced, it was limited to those born between a certain time, but in December 2025, the president announced that older children may be able to receive a deposit, too.  

Who’s Eligible for the $1,000 Newborn Contribution 

Your child qualifies for the full federal $1,000 contribution if they:

• Were born between January 1, 2025, and December 31, 2028

• Are a U.S. citizen

• Have a Social Security number

You do not need to meet any income requirements to be eligible.

Who’s Eligible for the $250 Contribution 

According to Whitehouse.gov, the first 25 million American children who meet the following criteria will receive a one-time $250 contribution as a result of the Dell Gift: 

• Are under age 10

• Live in ZIP codes with median household incomes below $150,000

• Are within the first 25 million eligible children identified through program data

How Trump Accounts Work

Once opened, Trump Accounts function like long-term investment accounts. Parents (and also employers, family and friends and charities) can contribute money each year, and the funds grow over time—similar to a retirement account, but with some added flexibility. Here’s what you can expect:

How much money do kids start with?

• Newborns: Eligible babies receive a $1,000 seed contribution from the U.S. Treasury.

• Older children (under age 10): Eligible kids receive a $250 contribution, thanks to the Dell family’s expansion gift. 

• Children under 18 who don’t qualify for either seed: Their account will start at $0, but parents, caregivers and employers can still make contributions at any time to help build savings for the future.

How much can you contribute each year?

• Parents and caregivers can contribute up to $5,000 in after-tax dollars annually.

• Employers can contribute up to $2,500 per year, and these contributions don’t count as taxable income for the employee.

• Certain governmental entities and charities may also make contributions, according to the IRS. More details on how these contributions will work are expected as Treasury guidance continues to roll out.

How is the account taxed?

• Money inside a Trump Account grows tax-deferred, meaning you don’t pay taxes on investment growth each year.

• Taxes apply later when the money is withdrawn—similar to how traditional IRAs work.

When can kids use the money?

Ryan Graves, chartered financial analyst and president at Bemiston Asset Management, explains it simply: “After age 18, consider it a ‘traditional IRA’—taxed when you pull pre-tax money, plus a 10 percent penalty before 59½ unless an exception applies.”

Here’s what that means in practice:

Before age 18 👉 Withdrawals generally aren’t allowed, with the exception of an ABLE rollover at age 17 for eligible individuals with disabilities.

After age 18 👉 The account works much like a traditional IRA:

• Withdrawals are taxed as income.

• Taking money out before age 59½ usually triggers a 10% penalty—unless the funds are used for certain qualified expenses.

What can you use the money for?

Trump Account funds can be used for a range of qualified expenses without triggering the 10% penalty, including:

• Higher education expenses

• A first-time home purchase (up to $10,000)

• Starting a business (up to certain limits)

• The birth or adoption of a child (up to certain limits)

These rules are designed to help kids—and eventually adults—use the money for major life milestones.

How does a Trump Account compare to traditional retirement accounts?

Roth IRAs and traditional IRAs are both retirement accounts designed to help adults save for the future. They come with specific tax benefits and rules around when the money can be used.

Trump Accounts aren’t retirement accounts, but after age 18 they follow rules that are similar to a traditional IRA—especially when it comes to taxes and penalties. 

The big difference: Trump Accounts are designed to help kids build long-term savings starting early in life (without needing employment income).

What the Investment Might Look Like in the Future

There’s a wide range of possible outcomes, because investment growth depends on how much is contributed over time and how the market performs. But the potential long-term impact is significant.

“Starting an account early creates long-term financial stability and eases the stress of rising parenting expenses,” says Tansley Stearns, president and CEO of Community Financial Credit Union. “Accounts with external contributions make it easier to build savings with less out-of-pocket strain.”

To give you a sense of what’s possible, Newsweek shared a couple of examples based on a 7% average annual return:

• If a family contributes the maximum $5,000 each year (on top of the initial seed money), the account could grow to about $6.95 million (pre-tax) by the time the child reaches age 65.

• If no additional contributions are made and only the initial deposit is left to grow, the account could still reach approximately $93,000 by age 65.

These aren’t guarantees—just illustrations of how powerful long-term investing can be, especially when an account is started early.

What This Really Means for Families

It’s easy to see numbers like $6.95 million or $93,000 and feel…a little stunned. But here’s the real takeaway:

1. Starting early matters more than contributing a lot. Even the smallest seed contribution can grow significantly over decades—especially when it’s invested from birth or early childhood. As Setu Shah, founder and CEO of Financial Doula, explains, “Newborn investment accounts build a financial safeguard for children, [allowing them] to financially benefit from compound growth due to investment into the stock market. There is a lot of evidence that even a slight financial headstart can help many children overcome socio economic barriers in the future.” 

2. You don’t have to contribute the max every year. Most families won’t put in $5,000 annually, and that’s okay. Even occasional contributions can compound meaningfully over time.

3. The account isn’t meant to cover baby expenses right now. Trump Accounts are designed for long-term financial support—think:

• Education

• First-home savings

• Emergencies

• Retirement

4. Market ups and downs are normal. The balances will rise and fall, but long-term investing historically trends upward.

5. This won’t replace a 529 or a savings account. It’s another tool in a family’s financial toolkit—not an all-in-one solution. It complements (not competes with) education-focused accounts like 529s. 

Upsides and Downsides of the Trump Accounts

Here’s a quick breakdown to help you see the big picture:

⭐ Upsides

• Free seed money for eligible children (either $1,000 for newborns or $250 for older kids who qualify).

• Tax-deferred growth, which means no yearly taxes on earnings like capital gains or dividends.

• Helps build a long-term financial foundation as your child enters adulthood.

• Flexible contributions: parents can add up to $5,000 each year, and employers can add up to $2,500.

• No earned income required, unlike Roth or traditional IRAs—kids don’t need a job to contribute.

💡 Downsides

• You can’t use the money now.

• Limited access to the money before age 59½, unless the withdrawal meets certain exceptions (more guidance to come).

• Market risk: the value of the account will rise and fall with the stock market.

• Less effective for education savings compared to 529 plans, which:

  • Allow tax-free withdrawals for qualified education expenses

  • Permit up to $35,000 to be rolled over to a Roth IRA

  • Offer more flexible use for school-related costs