Five types of contributions can be made to a child’s IRA account until the child turns 18.
The Internal Revenue Service (IRS) and the Department of the Treasury have issued guidance on Trump Accounts, a new type of individual retirement account (IRA) for children, the IRS said in a Dec. 2 statement.
The tax-advantaged Invest America accounts, commonly referred to as “Trump Accounts,” were established under the One Big Beautiful Bill Act signed into law by President Donald Trump in July. The plan aims to provide every newborn child a “head start toward lifelong financial security and the American Dream,” the White House said in a Dec. 2 statement.
Any child under 18 who is a U.S. citizen and has a valid Social Security number may open a Trump Account. In addition, children born between Jan. 1, 2025, and Dec. 31, 2028, will receive a $1,000 initial seed contribution from the government, according to the joint guidance issued on Tuesday.
“Families and others can contribute up to $5,000 annually,” the notice said.
Once an account is created, the period until Dec. 31 of the year a child attains 18 years of age is considered the growth period. For instance, a child born Oct. 1, 2026, will turn 18 on Oct. 1, 2044. The growth period in this case ends on Dec. 31, 2043.
The funds will remain private property under the control of a guardian until the child turns 18. According to the White House, the account can grow to as much as $1.9 million by the time the child is 28 years old if fully funded and left untouched.
The Trump Account can receive five types of contributions during its growth period—the initial $1,000 contribution made by the Secretary of the Treasury; certain qualified general contributions made by states, tribal governments, or entities such as tax-exempt organizations; contributions made by the guardian’s employer, qualified rollover contributions, and receipts from other sources such as the account beneficiary and parents.
For contributions made by employers and receipts from other sources, there is an aggregate annual limit of $5,000. Contributions made by employers are specifically limited to $2,500 per year. The other three types of contributions are not subject to annual contribution limits.
The IRS said that annual contribution limits will be indexed to inflation, and will start adjustments after 2027.
“Contributions to a Trump account during the growth period are not includible in income by the account beneficiary when made,” the notice said. “Contributions to Trump accounts cannot be made before July 4, 2026.”
The funds in the account can be invested only in “eligible investments” during the growth period. This includes a mutual fund or ETF that tracks stock indexes of mainly American companies, such as the S&P 500. The account cannot use leverage in investments (borrowing money to invest), with annual fees and related expenses not exceeding 0.1 percent of the account balance.
During the growth period, no distributions can be made from the Trump Account except under certain circumstances, such as a rollover or the death of the account beneficiary. In this period, the account is subjected to certain reporting requirements. Failure to fulfil reporting may incur penalties.
Once the growth period ends, distributions from Trump Accounts are subject to rules that typically apply to traditional IRA accounts. In addition, reporting requirements will be similar.
The Treasury and the IRS have requested public comments on these regulations, which must be submitted by Feb. 20, 2026.
