The Treasury Department and the IRS on March 6, 2026, released proposed regulations for Trump Accounts, the children's savings accounts created by last year's tax law. One package covers how an account is opened; the other covers the pilot program under which Treasury deposits $1,000 for each eligible child born from 2025 through 2028.
What changed
The rules introduce Form 4547, Trump Account Election(s), which families would use both to establish an account and to elect the $1,000 pilot contribution. The Treasury is also expected to offer an online application for the same purpose.
To qualify for the pilot deposit, a child must be a U.S. citizen with a Social Security number, born in calendar years 2025 through 2028, with no prior pilot election on file. The election is generally made by a parent or guardian who expects the child to be their qualifying child for the year the election is made. It can be filed as soon as the child meets the criteria, and no later than December 31 of the year the child turns 17.
Mechanically, the proposal treats the child as having made a $1,000 federal income tax payment. That creates a $1,000 overpayment, which Treasury refunds directly into the child's Trump Account. The pilot money does not count toward the annual contribution limit.
Only one person can make the initial election to open an account. Where the child is not in the pilot, the right passes in order to a legal guardian, a parent, an adult sibling and then a grandparent, according to an analysis by CohnReznick. A child may have only one Trump Account holding funds at a time.
How the accounts work
A Trump Account is a form of traditional IRA for someone under 18. Contributions can begin July 4, 2026, and are capped at $5,000 a year, a limit that will be indexed after 2027. That cap includes gifts from parents and relatives and employer contributions, which are limited to $2,500 per employee per year and are not taxable to the employee. No earned income is required. Contributions by individuals are not deductible.
Investments are restricted to mutual funds or ETFs that track an index of primarily U.S. companies, use no leverage and charge annual fees of no more than 0.1%. Withdrawals other than rollovers are generally barred until the year the child turns 18, after which regular IRA rules apply. When distributions are allowed, amounts above the account's basis are taxable. Pilot deposits and employer contributions do not create basis.
The after-tax math
Example: grandparents fund a grandchild's account born in 2025 with $5,000 a year for 17 years, and the child also receives the $1,000 pilot deposit.
| Component | Amount | Creates basis |
|---|---|---|
| Family contributions | $85,000 | Yes |
| Treasury pilot deposit | $1,000 | No |
| Hypothetical account value at 18 | $250,000 | n/a |
| Portion taxable when withdrawn | $165,000 | n/a |
The growth figure is illustrative only. The point is structural: after-tax family money comes back tax-free as basis, while the Treasury deposit, employer money and all earnings are taxed as ordinary income when withdrawn under IRA rules.
Moves to discuss with your advisor
- Filing Form 4547 for children born in 2025 or later so the $1,000 pilot deposit is not left unclaimed.
- Coordinating which relative opens the account, since only one initial election is allowed.
- Asking whether an employer plans to offer Trump Account contributions and how they would count against the $5,000 cap.
- Comparing a Trump Account with a 529 plan or custodial account for education and early-adult goals, given that Trump Account earnings are taxed on withdrawal.
Families already using gifting strategies often review how these contributions fit with their broader estate plan with a CPA or financial planner.
What to watch
Comments are due April 8, 2026, on the pilot program rules and May 8, 2026, on the account rules. Treasury said more proposed regulations will follow on employer contributions, governing documents, investments and distributions, all of which will shape how useful these accounts are for affluent families.
Sources
After TAX is an independent publication. Articles are general information, not tax, legal or investment advice. Consult a licensed professional about your situation.
