When we look back at 2025, one of the biggest pieces of financial news that shook the industry was the passing of the One Big Beautiful Bill Act (OBBBA) by Congress in the late summer. One of its most novel provisions was the creation of Trump Accounts — tax-advantaged savings accounts for children of U.S. taxpayers, designed to help the next generation build long-term financial security.
What Are Trump Accounts?
A Trump Account is a tax-advantaged savings account established under IRC Section 530A for U.S. citizen minors. They function similarly to a traditional IRA, with one key difference: there is no earned income requirement, meaning parents and guardians can begin funding an account from the moment a child is born.
The accounts are designed to grow over time and become accessible no earlier than January 1st of the year the child turns 18. At that point, funds can be used for qualifying expenses, including education, a first home purchase, starting a business, or retirement savings. Children have no obligation to withdraw funds at 18 — if left untouched, the account continues to be governed by traditional IRA rules for distributions, rollovers, and conversions. Similarly, distributions could be subject to early withdrawal penalties, much like an IRA, before age 59 ½ unless made for the reasons mentioned.
Annual contributions are capped at $5,000 per child, including parents, grandparents, extended family, and friends, with employers of parents eligible to contribute an additional $2,500, and nonprofit organizations also permitted to contribute. This means the circle of people who can help fund a child's future is notably broad. A condition worth noting, investments within a Trump Account are limited to diversified, low-cost mutual funds and ETFs that track the S&P 500 or a similar index of predominantly American companies, with annual fees below 0.1%.
Who Qualifies for a Trump Account?
Most U.S. citizen children with a valid Social Security number are eligible for a Trump Account, with the IRS processing one account per child. Parents or guardians may open an account for each of their children.
Children born between January 1, 2025 and December 31, 2028 are also eligible for the pilot program's $1,000 government seed contribution which parents must opt in for. Trump Accounts are not automatic-enrollment accounts; a parent or guardian must take action to establish and fund one.
How Do I Sign My Child Up?
The program launches on July 5, 2026. Parents can sign up in one of two ways:
- Register at trumpaccounts.gov — the site currently accepts sign-ups for enrollment alerts, with full account enrollment and funding available starting July 5, 2026.
- File IRS Form 4547 with your tax return — because the form was recently released and the program has not yet launched at the time this post was written, parents who want to use this route may benefit from filing a tax extension (deadline: October 15, 2026), by which time the form is expected to be finalized. This method also allows parents to opt in for the $1,000 seed contribution if their children or child qualifies.
The Takeaway
Trump Accounts are a new, government-backed way for parents to build long-term savings for their children, functioning like a traditional IRA without an earned income requirement. Starting July 5, 2026 — and for children born between 2025 and 2028, acting early means securing a $1,000 head start from the federal government. One nuance certainly worth noting is that due to the nature of Trump accounts, contributions from individuals (such as parents, grandparents, nonrelatives etc) are likely considered taxable gifts, and may require a form 709 filing as they are “future interest gifts” which are ineligible for the annual exclusion. Range is actively monitoring developments and is committed to keeping members informed as the program's rules are finalized.
Frequently Asked Questions
Can my child have a Trump Account and a 529 at the same time?
Yes. Trump Accounts and 529 college savings plans are separate account types and are not mutually exclusive. Parents can maintain both simultaneously. The key distinction is flexibility: 529 funds are optimized for education expenses, while Trump Account funds can be used for education, a first home, business startup costs, or retirement — giving the child more optionality at age 18, though distributions are taxable.
Are Trump Account contributions tax-deductible?
No. Contributions to a Trump Account are made with after-tax dollars, similar to a Non-Deductible IRA. The tax advantage comes on the growth side: funds grow tax-deferred, and qualified distributions are intended to be taxed like traditional IRA distributions. It may be prudent for parents and children to consider converting accounts to a Roth IRA once the child reaches age 18, to lock in tax-free future growth.
Can grandparents, friends, or family members contribute?
Yes. IRS guidance has clarified that contributions can come from parents, grandparents, extended family members, friends, employers, and nonprofit organizations — not only the child's parents or guardians. The $5,000 annual limit applies to all contributors combined (except non-profits allowing the pilot program to not count toward the annual limit), with employers able to contribute up to $2,500. Contributions in excess of the limit may be subject to penalties, and after 2028, the limitation for contributions will be adjusted for inflation.
What happens if my child doesn't withdraw the funds at 18?
There is no requirement to withdraw at 18. If the child chooses to leave the funds untouched, the account continues to grow and is governed by traditional IRA rules — including rules around required minimum distributions, rollovers, and conversions.
My child was born before January 1, 2025 — do they still qualify?
Yes, but not for the $1,000 government seed contribution. The pilot program funding is specifically for children born between January 1, 2025 and December 31, 2028. Depending on the child's age and ZIP code, contributions of $250 may also be available from certain charitable sources, though funding is limited and eligibility varies. Otherwise, children born before 2025 can still have a Trump Account opened and funded by parents, guardians, and other contributors up to the annual limits but may not receive additional “free” funding from the government.
Disclosures:
The information contained in this communication is for informational purposes only. This content may not be relied on in any manner as specific legal, tax, regulatory, or investment advice. While we strive to present accurate and timely content, tax laws and regulations are subject to change, and individual circumstances can vary. Range does not make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein.
You should not rely solely on the information contained here when making decisions regarding your taxes or financial situation. We strongly recommend consulting with a certified tax professional, accountant, or legal advisor to address your specific needs and ensure compliance with applicable laws.
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