Trump Accounts: IRS Notice & Form 4547 Guide
Introduction
Trump Accounts are new tax-advantaged savings and investment accounts for children, created by the One Big Beautiful Bill tax legislation, a key part of our ongoing tax reform coverage. IRS Notice 2025-68 explains how these accounts work, and draft Form 4547 is used to elect and open a Trump Account.
If you’re a parent, guardian, or other caregiver, this guide is designed to help you decide whether to open a Trump Account for a child in your family and how to complete the necessary paperwork.
To get a broader, plain-language overview of what Trump Accounts are and how they work, see this external guide.
This guide explains how families can use Trump Accounts for children under age 18 who have a Social Security number and describes the special $1,000 federal contribution available for eligible children born between Jan. 1, 2025, and Dec. 31, 2028.
We also outline how employers can contribute to Trump Accounts for employees’ children as part of a benefits strategy.
In this guide, you will learn how to:
- See how Trump Accounts are structured and what they’re designed to do.
- Review account opening and eligibility details.
- Evaluate tax benefits and contribution limits.
- Assess investment options and key restrictions.
- Stay informed about the pilot program and upcoming regulations.
Let’s explore the details!
Understanding Trump Accounts
Trump Accounts are tax-advantaged savings and investment accounts for children under age 18.
What Are Trump Accounts?
Trump Accounts are custodial investment accounts for minors, with a defined “growth period” that generally runs until the year the child turns 18.
Trump Accounts are a tax-advantaged savings option created by federal law and administered by the U.S. Treasury and the IRS.
This system lets families invest for long-term goals, using a clear, rules-based design backed by detailed statutory and IRS guidance.
Who Should Consider a Trump Account?
Parents or guardians of children born 2025–2028 who could receive the $1,000 federal deposit.
Parents with older children under 18 who want to build long-term, tax-advantaged savings.
Grandparents or other family members looking to invest for a child’s future.
The Role of IRS Notice 2025‑68 and Draft Form 4547
IRS Notice 2025-68 provides a general overview of how Trump Accounts work, and draft Form 4547 is used to elect and open an account and enroll in the pilot program.
Together, they spell out who counts as an eligible child, the $5,000 annual contribution limit (including employer contributions), and the requirement to invest in low-cost U.S. equity index funds.
This framework is intended to keep the process clear and compliant. For a plain-language summary, see our IRS Notice & Form 4547 guide.
Eligibility Criteria and Account Opening Process for Trump Accounts
This section outlines who qualifies for Trump Accounts and details the steps to open an account.
Eligibility Requirements for Families
To be eligible, a child generally must be under age 18 and have a Social Security number. Separately, the $1,000 federal pilot deposit is available only for children born between Jan. 1, 2025, and Dec. 31, 2028.
If your child meets these criteria, you’ll generally need to open a Trump Account and file Form 4547 so they actually receive the $1,000 federal deposit.
For a plain-language overview of who is eligible for a Trump Account and $1,000 deposit, see this external explainer.
These accounts are designed as long-term, tax-advantaged investment vehicles for children that can help eligible families build future savings.
How to Elect and Open a Trump Account
Parents and guardians who want their children to receive Trump Account benefits, especially the $1,000 federal deposit, should complete IRS Form 4547 and open an account as soon as the child is eligible.
For more details on requirements and benefits, visit our Trump Accounts Guide.
Trump Accounts are treated as a special type of IRA during the child’s growth period and generally convert to a traditional IRA when the child reaches age 18.
“By following these straightforward steps, families can confidently secure a tax-advantaged future for their children,” emphasizes our commitment to clear and effective guidance.
Contribution Rules and Tax Benefits
This section explains how to contribute to Trump Accounts and the related tax benefits.
Contribution Limits and Processes
You can contribute up to $5,000 per year to a child’s Trump Account, subject to future inflation adjustments.
Up to $2,500 of that annual amount can come from employer contributions that are excluded from the parents’ taxable income.
Under current guidance, contributions to Trump Accounts cannot be made before July 4, 2026, which helps create a manageable, structured rollout of the savings program.
Contributions go into a tax-advantaged savings vehicle that supports long-term goals.
The program also includes a $1,000 federal pilot contribution for eligible newborns and a $6.25 billion philanthropic gift philanthropic gift from Michael and Susan Dell that adds $250 to millions of additional children’s accounts.
Tax Implications and Benefits
Investment earnings in a Trump Account grow tax-deferred during the growth period and, like a traditional IRA, are generally taxed later at the beneficiary’s ordinary income tax rate when withdrawn.
This structure allows savings to grow without immediate tax and can help families build long-term financial security.
How Employers Can Help Employees’ Children
- Employers can contribute up to $2,500 per year to an employee’s child’s Trump Account, within the $5,000 annual contribution limit.
- These contributions are generally excluded from the employee’s taxable income if plan and IRS rules are followed.
Employers may want to educate staff about Trump Accounts and provide support so employees can set up accounts for eligible children.
From a compliance perspective, employers will generally need a written Trump Account contribution program and should watch for ERISA and nondiscrimination guidance as rules are finalized.
Trump Accounts Investment Options and Restrictions
Trump Accounts offer approved investment options and specific rules to protect tax advantages.
Approved Investment Vehicles
Approved investments are generally low-cost mutual funds or exchange-traded funds (ETFs) that track a broad U.S. stock index and do not use leverage.
Investment Restrictions and Guidelines
Investors must follow strict guidelines that restrict the types of assets permitted in Trump Accounts.
Some rules are in place to prevent risky investments in open accounts.
Following these guidelines keeps the account in its tax-advantaged status and meets regulatory standards.
For more insights, visit our Trump Accounts guide for details on account policies.
Conclusion: Trump Accounts – Your Guide to a New Tax-Advantaged Savings Option
This guide explains the essentials of Trump Accounts and how families can benefit from this new savings tool.
If you have a child who may be eligible, especially one born between 2025 and 2028, talk with a tax advisor now about opening a Trump Account and filing Form 4547 so your child doesn’t miss out on government-funded contributions.
Key Takeaways
In summary, this article covers the basics of Trump Accounts, including eligibility, contribution rules, and how to elect and open an account using Form 4547.
It also shows how IRS Notice 2025-68 and draft Form 4547 guide these accounts.
Ongoing Support and Next Steps
As the pilot program progresses, regulators may provide additional updates and clarifications.
For another example of recent IRS guidance under the One Big Beautiful Bill, see our IRS Tip and Overtime Deduction Guide for Tax Changes 2025.
Individuals with Trump Accounts for their children should keep an eye on future IRS guidance so they understand any changes to contribution rules or benefits.
Employers and tax professionals should also monitor regulatory changes to ensure accurate payroll and reporting for Trump Account contributions.
Staying informed guarantees compliance and supports your mission with timely and effective guidance.
Remain Audit-Ready and Informed
Clear documentation and a simple process support audit-ready financial reporting and keep your operations ready for an audit.
Proactive guidance and technology, including our tax and accounting services, help ensure accuracy and prevent common IRS inquiries.
Keep this guide handy as a practical reference for managing Trump Accounts and meeting compliance needs.
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About the Author
Steve Barkmeier CPA
It’s rare for even the largest accounting firms to be able to offer the expertise Steve brings to our clients. After 30 years of leadership positions in corporate tax departments at billion-dollar companies, including serving as the Vice President of Tax at the second largest newspaper chain in the United States, he joined WhippleWood in 2015.
