Trump Accounts Under the OBBBA: What Families and Employers Need to Know
A breakdown of the new tax-deferred savings accounts for children, including eligibility, contribution rules, and reporting requirements.
The One Big Beautiful Bill Act (OBBBA) added many tax changes, including the creation of Trump accounts under IRC Section 530A, added by Section 70204 of the OBBBA. The IRS originally issued Notice 2025-68, which provided additional guidance on the accounts and how they operate, and has recently released Revenue Procedure 2026-25 to further elaborate.
What is a Trump account?
A type of traditional IRA designed to grow alongside a child, created for a child under 18 who is a US citizen with a Social Security number.
How the Accounts Work
Trump account funds must be invested in eligible investments – such as mutual funds or exchange traded funds (ETFs) that track the S&P 500 or another equity index of primarily American companies. Investments using leverage or that have high fees (an expense ratio greater than a 0.1%) are not allowed.
These restrictions apply only during the growth period, which ends on December 31 of the year the child turns 17. At that point, the account converts to a standard traditional IRA and the investment restrictions no longer apply.
Only one funded Trump account is allowed per child at a time. Generally, no distributions are permitted during the growth period, except in cases of death, rollover, or distribution of excess contributions.
Opening an Account
To open a Trump account for a child and elect the pilot program contribution, a qualified individual must file Form 4547 — either with an original Form 1040 filing, or on its own through their IRS online account. A few key rules:
- Form 4547 should not be filed with an amended return.
- The child must be the filer’s qualifying child for the year the election is made.
- After filing, the qualified individual receives an activation email from no-reply@TrumpAccounts.Treasury.gov, sent to the address listed on Form 4547.
- The account cannot accept contributions — including the pilot program contribution — until it’s activated.
The $1,000 Pilot Program Contribution
Only children born between January 1, 2025 and December 31, 2028 are eligible for the one-time $1,000 pilot program contribution. Accounts can begin accepting this contribution, along with other after-tax contributions, starting July 4, 2026.
Contribution Limits and Types
Total contributions to a Trump account cannot exceed $5,000 per year (indexed for inflation beginning after 2027). Pilot program contributions, qualified general contributions, and qualified rollover contributions do not count toward this cap.
|
Contribution Type |
Details |
|---|---|
|
Pilot program contribution |
One-time $1,000; does not count toward annual limit |
|
Qualified general contributions |
From state/local governments, the US, DC, tribal governments, or 501(c)(3) organizations; does not count toward limit |
|
Employer contributions |
Excludable under Section 128; up to $2,500/year per employee, counts toward the $5,000 cap; subject to non-discrimination rules |
|
Qualified rollover contributions |
Must be the full amount of the IRA being rolled in; does not count toward limit |
|
Other contributions |
From the beneficiary, parents, or any other person; counts toward the $5,000 cap |
Trump accounts grow tax-deferred, like traditional IRAs. Pilot program and employer contributions do not create tax basis, but contributions from other sources do.
Distributions and Penalties
Once the growth period ends, distributions are allowed but may be subject to the 10% early withdrawal penalty unless an exception applies — such as for education costs or a first-time home purchase.
Reporting: New Form 5498-TA
To support tracking and reporting, the IRS has drafted a new form — Form 5498-TA, Trump Account Contribution Information — which trustees will issue annually. It will report:
- Pilot program and qualified general contributions
- Qualified rollover contributions
- Section 128 employer contributions
- Other contributions
- Basis (investment in the contract)
- Fair market value of the account
What’s Next
Additional IRS guidance is expected, including more detailed trustee reporting requirements and further clarification on employer and qualified general contributions.
For more information, visit TrumpAccounts.gov. A mobile app is also available that lets families track exactly which investments a child’s account holds and see how the account is projected to grow over time.
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