An update on regulations and guidance surrounding Trump Accounts—which are a new type of Individual Retirement Account (IRA) for children under 18, created under the Working Families Tax Cuts initiative—was announced by the Internal Revenue Service (IRS) on Tuesday.
Why it Matters
Trump accounts were created under this year’s One Big Beautiful Bill Act with the aim to give American children long-term financial security while helping families build generational wealth. The program combines government seed contributions with additional funding from parents, employers, and charities, which could affect millions of young Americans and future taxpayers.
What To Know
Trump Accounts can be opened by parents or guardians from early 2026, with contributions starting July 4, 2026.
Key updates and features announced by the IRS include:
- Under a pilot program, a one-time $1,000 government contribution will be given to eligible U.S. children born between January 1, 2025, and December 31, 2028—providing parents or guardians select this option when they open the Trump Account, on behalf of their child.
- There is a $5,000 annual contribution limit, per child, from all sources combined (including $2,500 per year from employers as a nontaxable benefit). These limits will be indexed for inflation starting after 2027.
- Charities and state, local, or tribal governments can make additional “qualified general contributions” that won’t count toward the $5,000 cap as long as they’re made to a “qualified class of beneficiaries” — a group or program that meets certain eligibility rules.
- Trump Account funds must only be invested in mutual funds or exchange-traded funds (ETFs) that track broad U.S. stock market indices—such as the S&P 500.
- Withdrawals are not allowed until January 1 of the year the child turns 18, except in limited cases such as rollovers, death, or disability. At adulthood, the account will generally convert to a traditional IRA and will become subject to the standard distribution and tax rules.
The initiative was recently boosted by a $6.25 billion charitable contribution from Michael and Susan Dell, which will add $250 to the Trump Accounts of the first 25 million eligible children—those aged 10 and under living in ZIP codes where the median household income is below $150,000.
What People Are Saying
President Donald Trump said: “This is a pro-family initiative that will help millions of Americans harness the strength of our economy to lift up the next generation. And they’ll really be getting a big jump on life.”
Michael Dell, chairman and CEO of Dell Technologies, told CBS News that: “We know that when a child has an account like this, even a modest sum, it really improves their outlook on life, and they are more likely to graduate from high school and college, buy a home, start a business, start a family, and become productive members of society.”
What Happens Next
The IRS has issued this update in response to questions from trustees and individuals—such as parents or guardians—who would like to contribute or open a Trump Account. It’s stated that it will continue to provide updates and additional information via the IRS.gov website.
