The One Big Beautiful Bill Act established a new type of tax deferred savings account for children (the “Trump Account”). The IRS just released detailed guidance in Notice 2025-68 explaining how these accounts work. In simple terms, after tax contributions can be made to a Trump Account that grow tax-free (similar to a Roth IRA).
One commentator demonstrates the benefits with the following example. “If you contribute $5,000 annually for 17 years, plus the $1,000 government seed, and the account grows at 5 percent per year, it could be worth about $138,000 by the time your child turns 18. If left invested until your child reaches age 60, that balance could grow to over $1.2 million”
Who can get one?
Any child who’s under age 18 and has a Social Security number is eligible. Each child can have only one Trump Account. Children born in 2025 through 2028 automatically receive a $1,000 nontaxable starter grant once their account is opened. On top of this nontaxable starter grant, on December 2, 2025, Michael and Susan Dell pledged to fund an additional $250 for up to 25 million eligible children – those under 10 and living in ZIP codes where the median household income is below $150,000.
How do you open it?
A parent or legal guardian normally opens the account. Notice 2025-68 states that the IRS will release a new form (Form 4547) and an online application system in 2026. Once available, you simply file the form or apply online to elect a Trump Account for your child. The IRS then works with an approved financial institution to set up the account and sends you activation instructions.
When can you contribute?
Accounts may be opened in 2026, with contributions allowed starting July 4, 2026. Almost anyone—parents, grandparents, friends, employers, and community organizations—can contribute subject to the contribution limitation of $5000 (to be indexed for inflation). The benefit associated with an employer’s Trump Account contribution program is particularly pronounced as the contribution will not count towards the employee’s taxable income.
There are various other requirements that are addressed in the recent IRS guidance that are not discussed here regarding the types of eligible investments, limitations on fees that may be charged to the account, trustee and reporting requirements, etc. that will presumably become part of the standard offerings of financial institutions to prospective account holders.
Bottom Line: This new IRS guidance is establishing the specific requirements that will facilitate the actual implementation of the Trump Accounts. Stay tuned.
“I’d rather regret the things I’ve done than regret the things I haven’t done.” — Lucille Ball