Take Advantage of a Trump Account Now

Back in April, I discussed alternative options for helping children save during their growing up years.  Section 529 accounts for direct college savings, IRAs and ROTH IRAs, and the new Trump Accounts.

Trump Accounts were created a year ago in the One Big Beautiful Bill Act.  They didn’t start being active until July 4, 2026.

A Trump Account resembles a traditional IRA mixed up with a Section 529 education savings plan account.  Annual contributions (currently maxed at $5,000 but indexed for inflation) can be made on behalf of any qualified child until the year that the child turns 18.  Contributions can be made by anyone.  The bonus is that the US Government will contribute $1,000 for any child born between January 1, 2025, and December 31, 2028.  Additional bonus, your small business (Schedule C, Partnership, Sub-S, or regular Corporation) can contribute up to $2,500 a year for each of your children, and its tax deductible!  Also, other entities can contribute to Trump accounts with no limits.  It can only be invested in certain mutual funds and exchange traded funds though.  The earnings are accumulated tax deferred.  Withdrawals are not permitted until the child turns 18.  At age 18, the account is converted to a regular IRA.  (That means, any withdrawals before the child turns 59 ½ are subject to the 10% early withdrawal penalty and well as regular income tax.)  NOTE: If the child uses these funds for higher education, they will not incur the 10% early withdrawal penalty but will pay regular income tax on the withdrawal. 

Right now, private citizens and private companies are donating additional funds to all Trump Accounts for children.  One example: Michael and Susan Dell donated $6.25 billion to provide 25 million American children 10 and under an incentive to claim the new investment accounts for children.

A Trump Account can be opened for any child who is under the age of 18 at the end of the year the account is elected and is a US citizen with a social security number.

A legal guardian, parent, adult sibling, or grandparent may open a Trump account by making an official election with the IRS.  That election can be by filing form 4547 with your annual tax return or through the government website TrumpAccounts.gov.  (Must do through a phone app you download from that website.)  So, what are you waiting for?

Psalm 127:3 says, “Behold, children are a heritage of Yahweh.  The fruit of the womb is his reward.”

Kelly Bullis is a Certified Public Accountant in Carson City.  Contact him at 775-882-4459.  As well as on our website at BullisAndCo.com. You can also find us on LinkedIn and Facebook.