Trump Accounts for Kids: How They Work and How to Sign Up (2026 Guide)

If you had a baby in 2025 or 2026 — or you're expecting one before the end of 2028 — the federal government would like to hand your child $1,000. Not a tax credit, not a coupon: an actual $1,000 deposit into an investment account in your child's name, left to grow in the stock market until they're 18.

That's the headline feature of Trump Accounts, a new savings account for kids created by the One Big Beautiful Bill Act in July 2025. After a year of setup, the program went fully live on July 4, 2026 — you can sign up today, and money is already flowing into accounts. Here's everything a parent needs to know, in plain English. (Quick note: this is education, not personalized tax or investment advice — for your family's situation, talk to a professional.)

What a Trump Account actually is

Strip away the branding and a Trump Account is a new type of individual retirement account (IRA) opened for a child. The account belongs to your child from day one — you act as the custodian until they turn 18. The IRS describes it as a savings tool designed to give kids "a jump start on saving," and structurally it works like a starter traditional IRA with training wheels:

• Money goes in (from you, relatives, an employer, even charities).
• It's invested in funds that track the S&P 500 or a similar index of mostly American companies.
• It grows tax-deferred — no annual tax bill on dividends or gains along the way.
• Nobody can touch it until the year your child turns 18.

The initial accounts are created and administered through the Treasury Department's program and managed in the official Trump Accounts app. Guidance is coming for moving accounts to private brokerages, but for now, Treasury's system is where the account lives.

If your family is new to investing for kids generally, our investing for kids hub is a good place to see how this fits into the bigger picture.

Who qualifies (and who gets the $1,000)

There are really two questions here, and parents mix them up constantly.

Who can have a Trump Account? Any child who is under 18 at the end of the calendar year you make the election and who has a valid Social Security number. For elections made in 2026, that means kids born in 2009 or later. One funded account per child.

Who gets the free $1,000? A narrower group: children who are U.S. citizens born between January 1, 2025 and December 31, 2028, with a valid SSN. For those kids, the Treasury makes a one-time $1,000 "pilot program" deposit — but only after a parent or guardian files the election. It is not automatic. As of March 31, 2026, the IRS reported more than 4 million children signed up, with over 1 million claiming the $1,000.

So if you have a 10-year-old and a newborn: both can have accounts, but only the newborn gets the $1,000.

How to sign up today, step by step

The program launched fully on July 4, 2026, per the Treasury's announcement, so this is a today thing, not a someday thing. There are three routes, all free:

1. Online through the IRS (fastest). Go to irs.gov/trumpaccounts, sign in or create an IRS online account (it uses ID.me for identity verification), and submit Form 4547, Trump Account Election(s). You'll need your child's Social Security number, date of birth, and address. The IRS says the whole thing takes 5 to 10 minutes, and you can check your election status afterward in the same account.
2. With your tax return. Form 4547 is a one-page form you can file along with your 1040. If you filed your 2025 return with it, you may already be done — check your status in your IRS account.
3. Through TrumpAccounts.gov and the app. The official Trump Accounts app (App Store and Google Play) is where you'll actually see and manage the account: balances, investment performance, one-time and recurring contributions, and a set of financial-education modules you can work through with your kids.

Once you're enrolled, you can start contributing immediately by linking a bank account in the app. For eligible babies, the $1,000 pilot deposits began going out on or after July 4, 2026.

One honest caveat: this is a brand-new government program at massive scale, so expect some rough edges. And be alert for scams — the only official channels are irs.gov, TrumpAccounts.gov, and the official app. Nobody legitimate will call or text asking for your child's SSN to "release" the $1,000.

Contribution rules, with real dollars

Here's how the money side works, based on IRS Notice 2025-68:

• The cap is $5,000 per child per year across all contributors, indexed for inflation starting after 2027. Contributions can be made until the year your child turns 18.
• Anyone can contribute — parents, grandparents, aunts, family friends. No earned income needed. These contributions are after-tax (no deduction), which matters later because they come back out tax-free.
• Employers can contribute up to $2,500 per employee per year under a workplace program, and it doesn't count as taxable income to you. It does count toward the child's $5,000 cap. Over 50 companies had committed to offering this at launch — worth an email to HR.
• The $1,000 federal deposit and charity/government contributions don't count against the $5,000 cap. (This is how programs like the Dell family's pledge to add $250 to millions of kids' accounts work.)

A concrete example: your employer contributes $2,500 for your daughter, grandma adds $1,000 at her birthday, and you set up $125/month ($1,500/year). That's exactly $5,000 — the max — and if she was born in 2026, the $1,000 from Treasury stacks on top of all of it.

What could that turn into? At the S&P 500's rough historical average of about 10% a year (never guaranteed), a single $1,000 at birth grows to roughly $5,500 by 18. Add $5,000 a year and you're looking at something in the neighborhood of $250,000 by 18 — before taxes on the gains. Play with your own numbers in our compound interest calculator for kids.

The tax rules in plain English

This is where Trump Accounts get genuinely confusing, so here's the simple version:

• While the money grows: no taxes. No annual tax on dividends or gains, unlike a regular custodial account.
• Going in: your own contributions are after-tax money and never deductible. Employer contributions go in pre-tax (you don't pay income tax on them).
• Coming out: your child eventually pays ordinary income tax on the earnings, the $1,000 seed, any charity money, and any pre-tax employer dollars. Your after-tax contributions come back tax-free, since you already paid tax on them.

Two practical implications. First, keep records — how much went in from which source determines the tax bill decades from now. The app tracks this, but save your own copies. Second, if your child takes taxable withdrawals while still young enough for the kiddie tax to apply, part of that income can be taxed at your rate, not theirs — a trap Fidelity's explainer flags specifically.

Withdrawal rules: locked until 18, IRA rules after

The lock-up is the defining trade-off of this account.

Before the year your child turns 18: no withdrawals, period. The only exceptions are rollovers to another Trump Account, corrections of excess contributions, or the death of the child.

From January 1 of the year they turn 18: the account is generally treated like a traditional IRA. Your adult child can leave it growing for retirement, roll it into a traditional IRA, or withdraw. Taxable withdrawals before age 59½ face the usual 10% early-withdrawal penalty unless an IRA exception applies — the big ones being qualified higher-education expenses, up to $10,000 for a first home, up to $5,000 for birth or adoption costs, disability, and major medical expenses.

You may have read about a "50% at 18, the rest at 25 or 30" structure. That was an earlier draft of the law — it did not make the final version. The final rule is simpler: locked until 18, IRA rules after.

Trump Account vs. 529 vs. custodial Roth IRA vs. UGMA/UTMA

| | Trump Account | 529 plan | Custodial Roth IRA | UGMA/UTMA | |---|---|---|---|---| | Free money | $1,000 for eligible 2025–2028 babies; employer $ up to $2,500/yr | State tax deduction/credit in 30+ states | None | None | | Annual limit | $5,000 (all sources) | Gift-tax exclusion applies ($19,000/donor in 2026) | Lesser of $7,500 (2026) or child's earned income | Gift-tax exclusion applies | | Earned income needed? | No | No | Yes | No | | Investments | U.S. stock index funds only (0.10% fee cap) | Plan menus (age-based, index, etc.) | Nearly anything | Nearly anything | | Tax on growth | Deferred; taxed as income at withdrawal | Tax-free for qualified education | Tax-free if qualified | Taxed yearly (kiddie tax) | | Access | None until 18; IRA rules after | Anytime (penalty on non-qualified earnings) | Contributions anytime; earnings at 59½ | Anytime, for the child's benefit | | Who controls at 18–21 | Child at 18 | Parent keeps control | Child at age of majority | Child at age of majority |

Who should prioritize what:

• Every eligible baby should get the election filed. The $1,000 is free, it costs nothing to claim, and there's no downside to letting it compound. Same logic if your employer offers contributions — that's free money too.
• Saving for college? The 529 usually still wins: tax-free withdrawals for education beat tax-deferred-then-taxed, and it gets gentler financial-aid treatment. See our full UGMA vs UTMA vs 529 breakdown.
• Kid has a job or side hustle? The custodial Roth IRA is hard to beat — tax-free forever is better than tax-deferred.
• Want flexibility above all? A UGMA/UTMA custodial account has no lock-up and no spending restrictions.
• Beyond the free money, whether to put your own $5,000/year here versus a 529 or Roth is a genuine judgment call that depends on your goals and tax situation.

What's still unclear (we'll keep this updated)

Being straight with you — a few things are still in motion as of our verification date (July 12, 2026):

• Final IRS regulations aren't out yet. Notice 2025-68 and proposed regulations cover the essentials, but details could shift at the margins.
• Moving accounts to your own brokerage. Major brokerages are building the plumbing to accept Trump Account rollovers, but the IRS is still finalizing how transfers out of the Treasury-administered program will work.
• What exactly happens at 18 — whether accounts convert automatically to a traditional IRA or require action — needs fuller guidance.
• State tax treatment of contributions and withdrawals varies and hasn't been fully addressed.

None of these change the core decision for most families: claiming the free money now is low-risk, and you can decide about additional contributions once the remaining rules firm up.

Filing a 10-minute form so your kid starts life with an investment account is also a lovely excuse to start talking about money as they grow — our guide to money milestones by age maps out what to teach when.

The bottom line

Trump Accounts are real, live, and free to open. If your child was born between 2025 and 2028, file the election and claim the $1,000 — that part is a no-brainer, and employer contributions are free money too. Beyond that, treat it as one tool on the shelf next to the 529, the custodial Roth, and the UGMA — each built for a different job.

Sources: IRS: Trump Accounts · IRS IR-2025-117 / Notice 2025-68 · IRS IR-2026-42 · U.S. Treasury launch release, July 4, 2026 · Fidelity: What are Trump Accounts? — facts verified July 12, 2026.