Trump Accounts for Kids: How to Claim Your Child's Account and the $1,000 Deposit

If you have a child under 18, they probably already have a Trump Account. On October 1, 2026, the Treasury Department said it had finished automatically enrolling every eligible child, more than 60 million of them. But an account that exists is not an account with money in it. Nothing gets deposited until a parent claims it, and the $1,000 government deposit for younger children needs its own election.

The short version: Trump Accounts are tax-deferred investment accounts for children under 18 with a Social Security number. Children who are U.S. citizens born from 2025 through 2028 can get a one-time $1,000 deposit from the government, but only if a parent claims the account and makes the pilot program election. Families and others can add up to $5,000 a year, employers up to $2,500 of that tax-free. The money is locked until the year the child turns 18, then follows traditional IRA rules. For college savings, a New York 529 plan is usually the better first dollar.

What a Trump Account is

A Trump Account is a new type of account created by the 2025 tax law (Section 530A of the tax code). Think of it as a traditional IRA opened for a child:

• The money is invested and grows tax-deferred.
• Under the proposed IRS rules, investments are limited to low-cost U.S. stock index funds. Final investment rules are still being written.
• Nobody can withdraw the money before the year the child turns 18.
• From then on, the account follows traditional IRA rules for withdrawals and taxes.

Contributions from parents are made with after-tax money. There is no federal deduction for putting money in.

Step 1: claim the account

Because enrollment was automatic, most parents do not need to open anything. You need to claim the account your child already has, through the official Trump Accounts site (trumpaccounts.gov) or by filing Form 4547 with your tax return. You will need your own and your child's Social Security numbers and dates of birth.

Until someone claims it, the account sits empty. There is one account per child, and the person who claims it manages it until the child takes over at 18.

Step 2: elect the $1,000 if your child qualifies

The government's one-time $1,000 deposit, the pilot program contribution, goes only to children who are:

• U.S. citizens, and
• born between January 1, 2025 and December 31, 2028, and
• have a valid Social Security number.

Claiming the account and electing the $1,000 are separate steps. Treasury cannot make the election for you. If you have a baby born in 2025 or 2026, check that both are done. Older children can still have an account, just without the $1,000.

Some children 10 and under who were born before 2025 may get a separate $250 charitable deposit from the Michael and Susan Dell Foundation if they live in a qualifying ZIP code. That money, like the $1,000, does not count toward the $5,000 yearly limit.

How much can go in, and from whom

The $5,000 limit is set to rise with inflation after the first few years. Contributions stop once the child turns 18.

Grandparents: a gift to a Trump Account is a gift to the child. Under IRS Revenue Procedure 2026-25, a grandparent whose total gifts to a grandchild stay within the $19,000 annual exclusion for 2026 generally does not need to file a gift tax return for Trump Account contributions.

What happens at 18

From January 1 of the year your child turns 18, the account works like a traditional IRA in their name:

• Money they take out is taxed as ordinary income, except the after-tax contributions you made, which come back tax-free.
• Withdrawals before 59 and a half generally carry a 10% penalty, unless an IRA exception applies, such as qualified higher education costs or up to $10,000 toward a first home.
• They can leave it invested for retirement, which is what the account is really built for.

That last point is the catch. A Trump Account is a retirement-style account for a child. It is a great place for the free $1,000. It is usually not the best place for the family's own college savings.

Trump Account vs New York 529

For a New York family, the usual order is: claim the free $1,000 first, then put college money in a NY 529 for the state deduction and tax-free withdrawals. If the 529 is already funded and you want to give a child a head start on retirement, a Trump Account is a reasonable next step. If your teenager has a job, a custodial Roth IRA can beat both, because qualified withdrawals are tax-free.

For small business owners

Employers can put up to $2,500 a year into each employee's children's Trump Accounts through a written contribution program, and the employee does not pay income tax on it. For a small business, that is a new, low-cost benefit that can help with hiring and retention. The IRS has issued proposed regulations on how these programs work, including the rules for owners who also work in the business, so talk with us before you set one up.

Before December 31

1. Claim every child's account. It costs nothing and keeps the door open for the $1,000 and any charity deposits.
2. Make the pilot program election for any child born in 2025 or 2026.
3. Fund the NY 529 first if college is the goal, to capture this year's New York deduction.
4. Tell grandparents about the $19,000 limit before holiday gifts.
5. Ask your employer whether it plans a Trump Account contribution program for 2027.

Questions about your family's situation?

London's Tax Services helps families and small business owners in Westchester County, the Bronx and New York City fit new accounts like this into a real plan, from our office at 75 South Broadway in White Plains. We can file Form 4547 with your return, compare a Trump Account with a NY 529 for your income, and set up an employer contribution program for your business. Book a free 15-minute call or call (646) 917-7714.