What is a Trump Account for kids? How Section 530A accounts work
Formally known as a Section 530A account, a “Trump Account” is a new type of investment account created
For children born between 2025–2028, the federal government intends to make a one-time $1,000 contribution into the account, regardless of family income.
Families, employers and others then can add contributions each year—helping build a foundation for the child’s education, work life, homeownership or retirement.
The idea is simple: When money is invested early and allowed to
Section 530A accounts: Eligibility, contributions & tax rules
Before opening a Section 530A account, it helps to understand the basic rules: Who’s eligible, how contributions work and how the tax benefits are applied. Here’s an overview of the key details.
Who qualifies?
To qualify for a Trump account, a child must generally meet the following requirements:
- The account beneficiary must be under age 18
- The child must have a valid Social Security number
- U.S. citizenship is required for the $1,000 federal deposit.
- A parent or guardian typically helps set up the account and oversees it until adulthood
Government & donor contributions
As mentioned, the federal government plans to make a one-time $1,000 contribution into Trump accounts for eligible children born between 2025–2028. In addition, some philanthropic donors have pledged supplemental contributions for eligible children. These programs are separate from the federal benefit and may vary by availability and timing.
Annual contribution rules
Families and others may contribute up to $5,000 per year per child. Within that:
- Employers may contribute up to $2,500 per year
- Family and friends can give as well
- These contributions do not replace or reduce gifts to 529 plans or other savings vehicles
Investment choices & taxes
Money in a Section 530A account can be invested in certain low-cost, broadly diversified U.S. equity index funds or similar eligible stock market funds. Investment earnings grow tax-deferred, meaning you won’t pay taxes annually on gains inside the account.
When the child reaches adulthood, the account typically converts into an
Think of it as planting a seed early, giving it time to grow and then transferring those resources when your child begins their adult life.
What happens if money is withdrawn early, or if a child dies before age 18?
Trump accounts are designed for long-term investing, so withdrawals before adulthood are generally discouraged and may carry tax consequences. In most cases, any withdrawn investment earnings would be taxed as ordinary income. The adult who controls the account (typically the parent or guardian) is usually responsible for reporting and paying the tax that results from an early withdrawal. Contributions themselves are not taxed when withdrawn.
If a child dies before age 18, the account is typically transferred to a beneficiary or the child’s estate. Any investment earnings would usually be subject to ordinary income tax at that time. The tax responsibility would fall to the person or estate receiving the funds.
Because these rules are still new and may be refined as
Timing & rollout
Section 530A accounts are expected to launch in July of 2026, with contribution options becoming available shortly thereafter. Families will generally elect the account when filing federal taxes.
Because this is a new program, details may evolve as the IRS releases guidance.
How to open and manage a Section 530A account
Here’s what the process may look like once accounts are available:
- Confirm eligibility for your child.
- Complete IRS Form 4547.
- Choose your contribution amount.
- Invest consistently over time.
- Review periodically as life changes.
You may consider using this as a teaching moment, involving your child in age-appropriate conversations about saving, gratitude and generosity.
Trump accounts FAQs
What is a Section 530A account (also known as Trump account)?
Who qualifies for the $1,000 government contribution?
What are the options allowed in these accounts?
This limited menu is intentional. By focusing on simple, low-fee, market-wide funds, the account is designed to support steady, long-term growth rather than short-term trading or speculation. That approach also helps keep costs down and makes it easier for families to stay invested over time, giving the money more opportunity to grow through compounding. As with any stock-based investment, balances will fluctuate.
How much can I contribute?
How is the account taxed?
When the child reaches adulthood (age 18) and the account transitions into an IRA-type structure, withdrawals later in life are generally taxed as ordinary income, similar to traditional retirement accounts. Only the earnings are taxed at withdrawal—contributions themselves are not taxed again.
Because this program is new and IRS guidance may continue to evolve, it’s wise to consult a tax professional before taking an early withdrawal or planning distributions.
Are contributions from families, friends or employers tax-deductible?
Families still may want to consult a tax professional to understand how contributions interact with any applicable gift-tax rules or state tax considerations.
Can Section 530A account funds be used for college?
What happens when my child turns 18?
Are the rules permanent?
Where do the accounts reside?
Families will be able to view and track the account through the program’s designated tools, and when the child becomes an adult, the account typically transitions into an IRA-type structure overseen under federal guidelines.
Does Thrivent offer Section 530A accounts?
However, we do offer several other ways to save and invest for your child’s future—including options such as 529 college savings plans, custodial accounts, Roth IRAs for teens with earned income and long-term investment accounts. Each offers different tax benefits, levels of flexibility and planning advantages depending on your family’s goals.
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