The IRS has released some guidance about the new Trump accounts, including details about the $1,000 pilot program for new babies.
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The IRS has released new guidance on Trump Accounts, a new type of individual retirement account (IRA) for eligible children created under the One Big Beautiful Bill Act (OBBBA).
What Are Trump Accounts?
Trump accounts are a new kind of retirement savings account created by Congress as part of OBBBA. Under OBBBA, a Trump account can be opened for any qualifying child under 18 at the end of that calendar year. A qualifying child must have a Social Security number.
To open the account, an authorized person (such as a parent or guardian) must make an election. After the election is filed, the Treasury will create the initial Trump account for the child.
The federal government will also deposit a one-time $1,000 “pilot program” contribution into the Trump account of any eligible child (with an election) who is a U.S. citizen and whose birth falls between January 1, 2025, and December 31, 2028. This $1,000 will not count against any contribution limits.
The funds in Trump Accounts are subject to investment restrictions, including that eligible investments be low-cost mutual funds or exchange-traded funds (ETFs) that track U.S. stock indexes, carry no leverage, and have annual fees no greater than 0.1%.
Can Parents Expect Additional Contributions?
According to the Trump Account website, the first 25 million American children age 10 and under living in ZIP codes with median incomes below $150,000 who opt in to Trump accounts will receive an additional $250. That $6.25 billion in funding will come from Michael and Susan Dell. (Michael Dell is the chairman and chief executive of Dell Technologies and has an estimated net worth of $148.9 billion, landing him at #10 on the Forbes 400.)
Is There A Limit On Contributions?
There is a $5,000 cap on contributions per year, adjusted for inflation. (Contributions that exceed the cap will have to be withdrawn.)
Contributions can be made by almost anyone, including parents and grandparents—those contributions will count toward the $5,000 annual limit.
Employers may also make annual contributions of up to $2,500 to an employee’s or the employee’s dependent’s Trump Account. An employer contribution will count toward the $5,000 limit each year, and it will not be considered taxable income for the employee.
Some government entities (like state and local authorities) and charities may also make qualified general contributions to Trump Accounts. Contributions from governments or charities will not count toward the $5,000 limit.
Contributions made by anyone other than an employer, government entity or charity will be made with after-tax dollars, meaning that you won’t receive a tax deduction for your contributions.
No one can put money into these accounts until July 4, 2026.
What About Withdrawals?
Withdrawals from the account are generally not allowed while the child is under 18. The only exceptions are limited — for example, rolling the full balance into another Trump Account, removing excess contributions, or distributing the account if the beneficiary dies.
When the child turns 18, those limitations largely fall away. At that point, the account would generally operate under the same rules as a traditional IRA.
What Is Form 4547?
Form 4547, Trump Account Election, is the form used to make the election for a qualifying child. The IRS states that it is posting a draft version of the form on its website (however, the form does not currently show up in the draft forms list). When final, the new form will be filed with your Form 1040 and can be used to establish a Trump Account and to enroll in the pilot program.
And yes, the form number not so coincidentally lines up with Trump’s presidencies (he was elected as the 45th and 47th president of the United States).
Where Can I Find The Guidance?
Notice 2025-68 provides an overview of how Trump Accounts work and addresses initial questions about creating both initial and rollover Trump Accounts, the $1,000 pilot program contribution, other contributions—including qualified general contributions and section 128 employer contributions—eligible investments, distributions, reporting, and coordination with rules applicable to other types of IRAs.
What’s Next For Taxpayers?
This guidance isn’t the same as regulations. The IRS says that it intends to issue proposed regulations in the future. Final regulations will then follow after a comment period. In the meantime, the agency directs taxpayers to a new website, trumpaccounts.gov, for more information on Trump Accounts.
There’s more information to come on OBBBA, so check back with Forbes. To keep it easy, I recommend that you subscribe to our free tax newsletter—that way, the information you need will land in your email inbox each Saturday morning.
Source: https://www.forbes.com/sites/kellyphillipserb/2025/12/02/irs-releases-guidance-on-new-trump-accounts-for-children/
