2026 Trump savings accounts
At a glance
- Trump Accounts are tax-deferred savings accounts created for children under 18 under the One Big Beautiful Bill Act.
- Newborns born between 2025 and 2028 automatically receive a $1,000 government contribution into their Trump savings account.
- Parents, guardians, family members, and employers can contribute to a child’s Trump Account up to the annual limit of $5,000 total and employers can contribute up to $2,500 of that total.
As the One Big Beautiful Bill Act became law, a new type of tax-advantaged savings account was introduced: Trump savings accounts. Like other investment accounts, there’s a host of specific requirements and tax rules that apply to these new account types.
If you have children eligible for these accounts and have questions like “What is a Trump account?” and “How does a Trump Account work?”, you’ve come to the right place.
The team at H&R Block is here to break down the details. In this post we’ll help you understand how these accounts work, who can contribute to them, and how much.
What are Trump Accounts exactly?
Trump Accounts are long-term savings accounts designed specifically for children. The accounts are tax-deferred, meaning the money grows without being taxed until it’s withdrawn. Trump savings account contribution and withdrawal rules are unique and shift once the child becomes an adult at 18.
What is the Trump savings account for newborns? How is it different?
The Trump savings account for newborns is related to the new Trump Account type, but as the name states, it only applies to newborns. Specifically, it refers to accounts for babies born between 2025-2028 who will automatically receive a $1,000 contribution from the government.
You may have heard this provision referred to as a Trump baby savings account.
How do Trump Accounts work?
Trump Accounts function similarly to custodial Traditional IRAs in that the contributions and earnings in the account can grow tax deferred. Additionally, a parent or guardian sets up and manages until the child reaches age 18.
However, there are several ways that Trump child accounts are not like a Traditional IRA investment. We’ve outlined a few of those ways here:
- You’re not required to have earned income to contribute.
- Contributions to the account are not tax deductible until the child turns 18.
- The rules for withdrawals from Trump savings accounts are also different.
Trump Account qualifications and contribution rules
As noted above, there are several rules about starting and adding money to the account. One set of rules applies to contributions during the account set-up stage and while the child is a minor, then another set of rules applies once the child becomes an adult.
We’ve broken out the answers for each stage as they apply.
Who qualifies for a Trump savings account?
Children under 18 at the end of the year who have a Social Security number qualify for these new accounts. Plus, only parents or guardians can open the account on behalf of the child.
Parents don’t need to meet any income threshold or filing status requirements to open an account.
Who qualifies for the $1,000 government deposit into a Trump Account?
In addition to the Social Security number requirement mentioned above, the government will make a one-time $1,000 contribution to children born in 2025 through 2028.
When can you open and contribute to these accounts?
You’ll first be able to open and contribute to a Trump Account for your child starting on July 4, 2026.
Who can contribute to a Trump child savings account?
For newborns and those under 18: If you’re the parent or guardian of an eligible child, you can set up and contribute to the child’s Trump Account. Your child’s grandparents and other family members may also contribute to your child’s account. Lastly, your employer or your child’s employer can contribute to the account.
Once the child is an adult, they will be the only ones who can contribute to the account.
What are the contribution limits for a Trump savings account?
Until the child is 18, the contribution limit is $5,000 per year per child for family members and up to $2,500 of that can come from the child or parent’s employer. Take note that the $1,000 government contribution isn’t counted toward this limit.
If you, family members or your employers go over the annual contribution, the amount you go over is considered an excess contribution and must be removed. That said, it’s a good idea to coordinate contributions to avoid creating an excess contribution.
After age 18, the normal contribution limits and rules for Traditional IRAs apply.
Trump savings account distribution rules
While taking distributions from a Trump Account may be years into the future, you may want to understand some of the details of how this will work.
When can you take distributions from a Trump Account?
Until the child turns 18, no distributions are allowed at all from a Trump Account.
Once they reach 18, the normal rules for Traditional IRAs apply. That means, if your child (as an adult) takes a distribution before age 59 ½, the distribution will be subject to a 10% penalty unless an exception applies.
How can the money from a Trump Account be used?
If the money is kept in the account until age 59 ½, the money can be used for any purpose the account owner chooses without any penalties. But there are exceptions before that age. If the owner makes qualified withdrawals for specific uses, they can avoid a penalty for specific uses. An example is if they use funds to purchase a first-time home.
Rely on H&R Block for help with your taxes
Understanding taxes for savings accounts can get tricky, but you don’t have to tackle them alone. No matter your tax situation, H&R Block is here to help. Make an appointment to file with a tax pro or with H&R Block Online.
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