The One Big Beautiful Bill Act (OBBBA) creates a new type of tax-advantaged account for eligible children. Section 530A accounts, also known as “Trump accounts,” can be established for children under age 18 who have a Social Security Number (SSN). Contributions to properly established accounts can begin on July 4, 2026.

The IRS has released guidance that sheds more light on the accounts and a temporary pilot program that will contribute $1,000 tax-free for certain children. Here’s what you need to know.

A Different Kind of IRA — Initially

A Trump account is established for the exclusive benefit of an eligible child, who is the account owner. While the account is essentially a type of IRA, it’s subject to special rules that don’t apply to other IRAs. Most of these rules are in effect only during the period that ends before January 1 of the calendar year in which the child reaches age 18 — what’s referred to as the “growth period.”

During the growth period:

• The account funds can be invested only in eligible investments — generally, mutual funds or exchange-traded funds (ETFs) that track an index of primarily U.S. companies, such as the S&P 500, and meet other criteria,
• The account has a lower contribution limit, generally $5,000 per year (adjusted for inflation after 2027),
• The account generally can’t make distributions (including hardship distributions), and
• Individuals can’t claim a tax deduction for their contributions.

After the child turns 18, traditional IRA rules kick in, including those regarding contributions, distributions (as well as the 10% early withdrawal penalty), required minimum distributions (RMDs), taxation, and Roth IRA conversions.

Account Election

Unlike regular IRAs, Trump accounts must be created initially by the U.S. Treasury Secretary. To have an account established for your child, you must make an election, and the child must not have reached age 18 before the close of the calendar year when the election is made. The child also must have an SSN before the election is made.

According to the IRS guidance, the election can be made on the forthcoming Form 4547, Trump Account Election(s), or through an online tool that isn’t yet available. You can file the form with your 2025 tax return. An account can be established at the same time you elect to receive a pilot program contribution (see below) or any time before January 1 of the year the child turns 18. Only one account can be opened per child.

After the election is made, the Treasury Department will send you the necessary information to activate the account. The IRS says this information will be available in May 2026.

Visit the IRS website for the most up-to-date information about Trump Accounts.

Pilot Program Participation

A one-time $1,000 government-provided contribution is available for children born after December 31, 2024, and before January 1, 2029, who are U.S. citizens with SSNs. The pilot program election can be made on Form 4547 or through the online tool.

The Treasury Department will contribute to accounts eligible for the pilot program as soon as practicable after the election is made. Note that no contributions will be made before July 4, 2026.

Contributions to the Account

Trump accounts can receive several types of contributions during the growth period besides contributions from parents, other loved ones or the children themselves. For example, an account can accept a “qualified general contribution” funded by states and political subdivisions, the federal government, Indian tribal governments, or certain nonprofits. These contributions, which will funnel through the Treasury Department, can be made only to “qualified classes,” such as those residing in certain areas and born in specific years.

Employers can contribute up to $2,500 per year (adjusted for inflation after 2027) to the accounts of employees or their dependents, with contributions generally excluded from the employee’s taxable income. The limit applies on a per-employee basis. Trump accounts can also accept qualified rollover contributions.

Pilot program contributions, qualified general contributions, and qualified rollover contributions don’t count toward the annual contribution limit. However, employer contributions do count toward the limit. Notably, contributions must be made within the calendar year to count toward that year’s limit — the contribution deadline doesn’t extend to April 15 of the following year as it does for traditional and Roth IRAs.

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