Signed into law on July 4, 2025 as part of the One Big Beautiful Bill Act, the Trump account (the new §530A account) is a tax-advantaged retirement account opened in a child's name. Any child under 18 with a Social Security number is eligible — there are no income limits on contributors and no earned-income requirement. Parents, grandparents, and even employers can contribute up to a combined $5,000 per year (employers up to $2,500 of that total), and the balance grows tax-deferred. U.S.-citizen children born between 2025 and 2028 also receive a one-time $1,000 federal contribution that does not count against the annual limit. During the "growth period" — from birth until the year before the child turns 18 — funds stay invested in low-cost U.S. index funds and cannot be withdrawn; after that, the account follows standard traditional-IRA rules.
Contributions open July 4, 2026. An account can be established by filing IRS Form 4547 with a tax return or through the federal portal at trumpaccounts.gov, after which a custodian administers it. We're glad to help you confirm eligibility, coordinate contributions across the family, and weigh the Trump account against — or alongside — a Coverdell ESA or 529 plan.
How the three compare
|
New for 2026
Trump AccountIRC §530A
|
Coverdell ESAIRC §530
|
529 PlanIRC §529
|
|
|---|---|---|---|
| Best suited for | Long-horizon savings begun in childhood, and capturing the $1,000 federal seed | K-12 and education costs that benefit from open investment choice | Larger college-savings goals and capturing a state tax deduction |
| Annual contribution limit | $5,000 per child (indexed after 2027); employers may fund up to $2,500 of that | $2,000 per child — across all contributors combined | No federal cap; gifts up to $19,000 per donor avoid gift tax ($95k five-year front-load). High plan maximums |
| Who can contribute | Anyone — no income limits, no earned-income requirement | Phases out at $95k–$110k (single) and $190k–$220k (joint) income | Anyone — no income limits |
| How it's taxed | After-tax contributions (employer share pre-tax); grows tax-deferred; taxed as a traditional IRA at withdrawal | After-tax contributions; growth and qualified withdrawals are tax-free | After-tax contributions; growth and qualified withdrawals are tax-free |
| How funds can be used | Locked until the year the child turns 18; then standard traditional-IRA rules — not limited to education | Qualified K-12 and higher-education expenses | College & vocational costs; up to $20,000/yr K-12 tuition (2026); up to $35k lifetime Roth IRA rollover |
| Government incentive | One-time $1,000 federal contribution for U.S.-citizen children born 2025–2028 | None | Many states offer an income-tax deduction or credit |
| Investment choices | During the growth period, low-cost U.S. index funds & ETFs only (fees under 0.10%) | Broad — individual stocks, mutual funds, ETFs (self-directed) | The plan's menu of pre-built portfolios |
| Timing & access | Open any time before age 18; funds locked until the year the child turns 18 | Contributions stop at 18; balance used by 30 (special-needs exceptions) | No age or time limits |
| State tax benefit | Varies by state; treatment still developing | None | Often yes, typically for the in-state plan |
Getting started with a Trump account
The child must be under 18 with a valid Social Security number. U.S. citizenship is required for the one-time $1,000 federal seed.
File IRS Form 4547 with your tax return, or enroll at trumpaccounts.gov. A custodian then sets up and administers the account.
Contributions open July 4, 2026. We'll help coordinate family and any employer contributions within the $5,000 annual limit.
