Trump Accounts, a new federally created savings vehicle for American children, begin accepting contributions on July 4, 2026. Established under Section 530A of the Internal Revenue Code as part of the One Big Beautiful Bill Act, they have already generated considerable discussion among families.
At Kore Financial Group, we believe everyone deserves access to clear, accurate financial guidance, particularly when new legislation creates both opportunity and complexity. This overview is designed to help you understand the basics of Trump Accounts and how to think about them within the broader context of your financial plan.
What Are Trump Accounts?
Trump Accounts are custodial savings accounts held in a child’s name. Any child under age 18 who holds a valid Social Security number and U.S. citizenship is eligible. A parent or guardian serves as the account custodian until the child assumes full ownership at age 18. The account itself begins operating under traditional IRA rules at the close of the calendar year in which the child turns 17.
Who Receives the Federal $1,000 Seed, and Who Does Not
Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens, may be eligible for the one-time $1,000 federal contribution. The election is made on IRS Form 4547, available through TrumpAccounts.gov. (Because this involves modifying a tax return, we strongly encourage coordination with your tax professional before proceeding.)
Children born before January 1, 2025, are not eligible for the federal seed contribution. However, they may still open a Trump Account with all other account features intact, provided they are under age 18 and hold a valid Social Security number. For families with older children, the account may still serve a meaningful supplemental role.
Who Can Contribute and How Much
Once open, contributions may come from several sources:
- Parents, family members (including grandparents), friends, and the child may contribute up to $5,000 in total per year. This limit will be indexed for inflation beginning in 2027.
- Employers may contribute up to $2,500 per year on behalf of an employee or the employee’s dependent. These contributions count toward the $5,000 annual combined limit.
- Governmental entities, state programs, and eligible 501(c)(3) organizations may make qualified general contributions to a class of beneficiaries. These contributions do not count against the individual $5,000 annual limit.
- There is no earned income requirement for the child.
An important tax distinction: Individual contributions from parents, family members, and the child are made with after-tax dollars and are generally not taxable upon withdrawal. The federal seed payment, employer contributions, and qualified charitable contributions are treated as pre-tax and will be taxable as ordinary income when withdrawn.
Where the Money Can Be Invested
Account funds must be invested in low-cost U.S. equity index funds or exchange-traded funds. The law imposes an annual fee cap of 0.10 percent (10 basis points).
In practice, this means the account is concentrated in U.S. stock market exposure without access to international equity, fixed income, or other asset classes. For families accustomed to a diversified portfolio strategy, this is a meaningful distinction. Over an 18-year horizon, a U.S. equity index allocation has historically performed well, though the lack of broader diversification is worth discussing with your advisor.
The Growth Period and What Happens at Age 18
The growth period begins when the account is established and ends on December 31 of the calendar year in which the child turns 17. Distributions are generally not permitted during this period. At its close, the account begins operating under traditional IRA rules, and the child takes full ownership at age 18.
Penalty-free withdrawals after age 18 may be made for the following purposes:
- Qualified higher education expenses, including tuition, fees, required books, and room and board.
- A first-time home purchase, up to $10,000 lifetime.
- Withdrawals after reaching age 59½ for retirement purposes.
- Other traditional IRA exceptions under IRS rules, including disability and certain medical expenses.
It is important to note that, unlike a 529 account, Trump Accounts carry no legal restriction on how funds are used once the child reaches age 18. Withdrawals for purposes other than those listed above will be subject to ordinary income tax and, in most cases, a 10 percent early withdrawal penalty on the taxable portion. Families contributing with specific intentions (e.g., education funding) should factor this flexibility into their overall planning conversation.
Additionally, required minimum distributions (RMDs) will eventually apply, consistent with traditional IRA rules. Under current law, the account holder's RMD age is 75.
How Trump Accounts Compare to Other Savings Vehicles
Trump Accounts are not intended to replace existing savings tools. How they fit into your plan will depend on your goals.
If education funding is your primary objective, a 529 plan continues to offer tax-free growth and tax-free withdrawals for qualifying education expenses, making it a strong dedicated option for that purpose.
If your goal is to build long-term flexibility for a child, whether for education, homeownership, or eventual retirement, Trump Accounts may serve as a meaningful complement to existing savings vehicles.
Both account types can be held simultaneously, and there is no rule preventing families from maintaining both a 529 and a Trump Account for the same child.
A Note on Louisiana and State Tax Conformity
Federal tax treatment is only one part of the picture. States are not required to conform to federal tax rules, and some do not. Families should confirm how Louisiana currently treats Trump Account contributions, growth, and withdrawals before making substantial contributions.
This is an area where guidance continues to evolve. Our strong working relationships with CPAs and tax professionals allow us to bring truly collaborative, tax-intelligent planning to these conversations, one of the hallmarks of how Kore Financial Group serves clients across Louisiana communities.
What to Consider Right Now
The most time-sensitive action for families with children born in 2025 or 2026 is to establish the account and file the pilot program election to claim the federal $1,000 contribution.
- If your child was born in 2025: File IRS Form 4547 through TrumpAccounts.gov. Contributions may begin after July 4, 2026.
- If your child was born in 2026 or will be born in 2027 or 2028: File Form 4547 at any time before December 31 of the year your child turns 17.
- If your child was born before 2025 and is under 18: An account may still be opened without the federal seed contribution.
- Regardless of birth year: Confirm your state’s tax treatment of Section 530A before making substantial contributions.
- If you already hold a 529 account: Meet with your advisor to review how a Trump Account might complement, rather than replace, what you already have in place.
A Few Important Cautions
New account types take time for implementation guidance to fully settle. As of July 2026, several aspects of Trump Accounts are confirmed in statute, but IRS regulations are still being finalized. Areas of ongoing guidance include eligibility verification for the federal seed payment, gift tax treatment of contributions from grandparents, and final withdrawal rules as they interact with traditional IRA frameworks.
We Are Here to Help
Tax-intelligent planning is at our KORE, and our advisors are accessible, personally responsive, and genuinely invested in helping you make sound decisions.
If you have questions about how Trump Accounts fit into your family’s financial picture, we encourage you to reach out to your Kore advisor before making contributions or elections, not afterward. These are exactly the kinds of conversations we are here to have.
Sources
1. Investor.gov, April 2026 — https://www.investor.gov/introduction-investing/investing-basics/investment-accounts/tax-advantaged-accounts/trump-accounts
2. IRS.gov, December 2, 2025 — https://www.irs.gov/pub/irs-drop/n-25-68.pdf
3. GovInfo.gov, March 9, 2026 — https://www.govinfo.gov/content/pkg/FR-2026-03-09/pdf/2026-04533.pdf
4. DLA Piper Knowledge, March 30, 2026 — https://knowledge.dlapiper.com/dlapiperknowledge/globalemploymentlatestdevelopments/2026/employer-contributions-to-section-530A-trump-accounts-key-points
Disclosure: This blog is for informational and educational purposes only and does not constitute tax, legal, or investment advice. Trump Accounts rules are subject to ongoing IRS guidance. Please consult a qualified tax advisor or financial professional before making decisions based on this content. Projected growth figures, where referenced, are hypothetical and illustrative only; past performance of any index does not guarantee future results. Exchange-traded funds are sold only by prospectus. Please read the prospectus carefully for details on risks, expenses, and investment objectives. Asset allocation and diversification are approaches to help manage investment risk and do not guarantee against loss. A 529 plan is a tax-advantaged education savings plan. Before choosing a plan, consider your state’s tax treatment, associated fees, and expenses. If you make nonqualified distributions, earnings will be subject to income tax and a 10% federal penalty tax.