Trump Accounts, also known as 530A accounts (which we’ll be calling them going forward to depoliticize them), are tax-advantaged investment accounts that can be opened for children. They officially became available on July 4, 2026.
Earnings on investments in the account are tax-deferred. On January 1 of the year the child turns 18, the account is converted to a Traditional IRA and ownership is transferred over to the child.
Did you have a baby recently?
The U.S. Treasury will contribute $1,000 tax free into accounts for children born between January 1, 2025 and December 31, 2028 who are U.S. citizens. This is essentially FREE MONEY from the government, so make sure to sign up if your baby qualifies for this one-time deposit.
Children born outside this timeframe can also qualify for 530A accounts, but they won’t get this contribution. However, the Michael and Susan Dell Foundation pledged $250 contributions for children who live in ZIP codes where the median household income is below $150,000. You can check your zip code here. This is specifically for children under age 10 who do not qualify for the $1,000 grant.
There are no fees to open an account. You’ll pay an expense ratio of no more than 0.1% of your investment balance, which is built into your fund’s value and won’t be charged separately.
Who is eligible to open a 530A account?
Parents or legal guardians can open 530A accounts for children under 18 who have a Social Security Number. They’ll manage the account until their children turn 18.
How do I open a 530A account?
First, submit Form 4547 to the IRS. You can do this online through the same account you use to make tax payments to the IRS, or submit it through the Trump Accounts app. The app is very user friendly and an account can be set up in less than five minutes. You can also file it with your tax return or mail it in.
After that, you can set up your child’s account at TrumpAccount.com. You can manage the account in the Trump Accounts app.
Who can contribute, and what benefits do they get?
Multiple people can contribute, but with few exceptions, those combined annual contributions are capped at $5,000. (Beginning in 2028, this cap will be indexed to inflation.) Contributions can come from:
- Parents, family members, and friends. Contributions aren’t tax-deductible and are made with after-tax dollars.
- The child themselves. Children under 18 with earned income can contribute after-tax money.
- Employers can contribute up to $2,500 per employee, for the benefit of an employee themselves, or an employee’s children. This counts toward the $5,000 cap. Employer contributions are pre-tax, and employers may choose to offer the ability for their employees to make pre-tax contributions to their accounts.
- Business owners. Self-employed business owners who pay themselves W-2 wages (such as S corporation owners) may allow the business to fund their own children’s accounts with pre-tax dollars. For a solopreneur who is also an employee of their own company, that can mean a business deduction on one side and no income tax on the other. There are some other rules business owners need to follow, so consult a tax professional or financial advisor. Note: This could be a very powerful wealth strategy for business owners to set their kids up for future wealth while receiving tax benefits at the same time!
- The government and philanthropic organizations can contribute outside of the $5,000 limit.
How are funds in 530A accounts invested?
Currently, all contributions are automatically invested in the State Street SPDR Portfolio S&P 500 ETF (SPYM), an ETF that tracks the performance of the S&P 500 Index. Eventually, there will be additional ETFs to choose from:
- iShares Core S&P 500 ETF (IVV)
- Vanguard Total Stock Market ETF (VTI)
- State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM)
- iShares Core S&P total U.S. Stock Market ETF (ITOT)
Cash and money market funds aren’t available within 530A accounts. Any dividends and capital gains are reinvested.
What are the rules about withdrawing money?
No withdrawals are allowed until December 31 of the year the child turns 17. The year they turn 18, the rules are similar to a Traditional IRA. You can make qualified withdrawals without a penalty for education expenses, buying a first home, or a disability. But a 10% penalty will apply for non-qualified withdrawals made before you turn 59 1/2.
Pro Tip: the year your child turns 18 may be a great time to convert this account (or a portion of the account) to a Roth IRA. Their income will likely be low which means their tax bracket may also be low. Converting the money to Roth in their late teens or early 20s allows the account to grow tax free for the next several decades, which could translate to hundreds of thousands of dollars in future tax savings by the time they retire!
My child is disabled. Will a 530A account count as income?
Money in a 530A account (including the $1,000 contribution from the government) doesn’t count as income or resources for SSI through the end of the year your child turns 17. Funds may be eligible to roll over into an ABLE account in the year they turn 17. Money can’t be withdrawn before age 18.
How are 530A accounts taxed?
Some funds in the account will be taxed upon withdrawal, and some will be able to be withdrawn tax-free.
Earnings, the government’s $1,000 contribution, and contributions from philanthropic organizations, employers, or the government will be taxed as ordinary income when withdrawn.
Individual contributions that were made with after-tax dollars are available tax-free after the child turns 18.
So, should I open a 530A account for my child?
If your child qualifies for the free grant or philanthropic money, or your employer will make a contribution, then it’s in your child’s best interest for you to sign up and take advantage of that free money that will grow tax deferred for the future! If you’re a solo business owner (filing as an S-Corp) it makes a ton of financial sense as well.
How much to contribute to these accounts depends on your overall financial situation. If you’re behind on your own retirement or paying off high-interest rate debt, focus on your own financial security before creating future financial stability for your child. It’s the best gift you can give them.
If you’re already on track with your own financial goals and are wondering what other accounts you can set up for your children (beyond 529 plans), a 530A account could be a great option! It’s worth talking to your financial planner about funding these accounts to create more options and flexibility for your kids as they become adults.
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