Trump Accounts

Read Time / 3 Minutes

Theme / Financial Planning

If you’ve filed your taxes this year, you were probably asked about Trump Accounts and whether you are able to apply for one for your children. There is still a lot up in the air regarding Trump Accounts, but here are some facts that we do know, and whether it applies to you.

What are Trump Accounts?

Trump Accounts are a new type of custodial investment account for your children. In opening one, the child will be the legal owner of the account, with a guardian as the custodian of the account. At 18, the minor (owner) will have full discretion over their account, for which they can use it for qualified expenses.

When can they use the money, and what can it be used for?

Funds in a Trump Account cannot be touched until the child turns 18. This differs from other custodial accounts, like a UTMA, in that funds can be used before the child is 18. 

Once the child turns 18, the account functions like a Traditional IRA. Distributions can be taken for certain qualified expenses – like education or first-time home purchases – otherwise they are subject to the typical 10% early withdrawal penalty an IRA would be susceptible to. At 18, Trump Accounts will be eligible to roll into a Traditional IRA or Roth IRA.

What are the contribution rules?

There are specialty rules in place if you’re funding the account from charitable donations, from an employer, or a rollover; however, for most parents who look to contribute to their child’s future, there will be a $5,000 annual limit.

For children born in 2025-2028, a $1,000 “bonus” will be funded directly from the U.S. Treasury. If your child was born before 2025, they may be eligible for a $250 bonus thanks to Michael and Susan Dell. The child must be under 10 years old and in an eligible region of the United States. (For more specific information, speak to your financial advisor)

How do I open a Trump Account for my child?

You can opt into opening a Trump Account when filing your taxes via the Tax Form 4547 (an ode to Trump being the 45th and 47th President). Additionally, the U.S. Government is working on an online portal to create your account. Contributions cannot be made until after July 4, so you won’t be missing out on investments before then.

Should I open a Trump Account for my child?

Talk to your financial advisor. For most children born in 2025 and 2026, opening an account for the $1,000 bonus money makes sense, but talk to your advisor and see if a Trump Account is right for your savings goal.

What investment options are in a Trump Account?

This is what is most unclear about Trump Accounts currently. It appears the U.S. Government will have a specific platform for opening Trump Accounts, and it seems to have limited investment options within the account. As more information becomes available, consult with your financial advisor.

“Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.”

Proverbs 13:11 ESV

Nathan Carroll

Registered Assistant

208-918-8655

nathan.carroll@christianwm.com