Summary
The IRS and Treasury Department have shared new rules about Trump Accounts, a savings plan that gives $1,000 to newborn eligible children in the U.S., starting in 2025. Families can start opening these accounts in 2026, and the accounts will have specific rules for who can open them and how the money can be used. These accounts are part of a law called the One Big Beautiful Bill Act passed in 2025.
Key Facts
- Trump Accounts are new savings accounts for children born from 2025 to 2028 who are U.S. citizens.
- Each eligible newborn will receive a $1,000 deposit from the Treasury Department.
- Parents or guardians must open the Trump Account by filing a form with their tax return or through an IRS online portal by the end of the year the child turns 17.
- Contributions to the account from individuals and employers are capped annually, with a total limit of $5,000 adjusted for inflation.
- The funds can only be invested in index-tracking mutual funds or ETFs focused on U.S. stocks.
- Withdrawals cannot be made until the beneficiary turns 18, after which the account functions like a traditional IRA for taxes.
- The initiative stems from the One Big Beautiful Bill Act, enacted in 2025, under President Trump's administration.
- The IRS will collect public comments before finalizing the rules for Trump Accounts.
