IRS Issues Update on Trump Accounts
Summary
The IRS announced updates on Trump Accounts, a new type of retirement savings account for children under 18, part of the Working Families Tax Cuts plan. These accounts allow contributions from parents, employers, and charities, with a government contribution option for eligible children. The goal is to help American families build long-term financial security.Key Facts
- Trump Accounts are part of the Working Families Tax Cuts initiative and were introduced to help families save for their children’s future.
- Parents or guardians can open Trump Accounts starting in 2026, with contributions beginning in July of that year.
- Eligible children born between 2025 and 2028 may receive a one-time $1,000 contribution from the government if selected.
- Total contributions to a Trump Account are capped at $5,000 annually, with up to $2,500 possible from employers.
- Charitable and government contributions that meet specific criteria do not count toward the $5,000 limit.
- Funds in Trump Accounts can be invested in mutual funds or ETFs linked to the U.S. stock market.
- Withdrawals from the accounts are limited until the child turns 18, except in specific cases such as a rollover or disability.
- Michael and Susan Dell contributed $6.25 billion, leading to a $250 addition to the Trump Accounts of 25 million eligible children.
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