Key Takeaways
- Treasury auto-opened Trump Accounts for eligible children starting October 1, 2026.
- You must still claim the account in the app, and elect the $1,000 on Form 4547.
- Family, friends and employers can add up to $5,000 a year combined in 2027.
- At 18 it follows traditional IRA rules, so earnings are taxed as ordinary income.
Your child probably already has a Trump Account. Starting October 1, 2026, Treasury opened accounts automatically for eligible children, so you no longer have to sign up first. What you do have to do is claim the account, and for kids born 2025 through 2028, separately elect the $1,000.
Until you claim it, nobody can manage the account or add money to it. The $1,000 doesn’t arrive without its own election either. Here’s how to do both, plus the part most coverage skips: at 18 this becomes a traditional IRA, and most of what comes out is taxed as income.
Claiming an Auto-Opened Account, Step by Step
The IRS says you don’t need Form 4547 to open an account Treasury already created. You do need to claim and activate it:
- Download the Trump Accounts app (App Store or Google Play) or go to TrumpAccounts.gov.
- Verify your own identity, then your authority to manage your child’s account.
- Finish the claim and activation steps in the app.
- If your child was born 2025 through 2028, submit Form 4547 and check the box for the $1,000 pilot contribution.
You can file that election in the app, on the website or in your IRS online account. If you already asked for the $1,000 earlier this year, you don’t have to do it again. The IRS Trump Accounts FAQ walks through each step.
Make sure the names, Social Security numbers and birth dates you enter match Social Security’s records exactly. Mismatches are what hold claims up.
If You Got a CP318 Notice or a Treasury Letter
A Notice CP318 from the IRS means your election needs another step or has an error. Follow the notice and resubmit Form 4547 with corrected details. Don’t file an amended return (Form 1040-X) to fix it, even if your original election went in with your taxes.
A letter from Treasury usually means your child may qualify for the $1,000 and explains what’s left to do. IRS phone agents can’t fix elections or claim accounts for you. For help with the account itself, the program line is 866-USA-4547.
Real program emails come only from no-reply@TrumpAccounts.Treasury.gov. With this many families getting letters at once, I’d expect copycat texts. My post on spotting fake tax refund texts covers the same warning signs.
Which Children Get Free Money, and How Much
Any child under 18 with a Social Security number can have a Trump Account. Only some get a deposit they didn’t pay for.
| Your child | What goes in automatically |
|---|---|
| Born Jan 1, 2025 to Dec 31, 2028, U.S. citizen | $1,000 from Treasury, once you elect it |
| Age 10 or under, born before 2025, in a ZIP code with median income of $150,000 or less | $250 pledged by Michael and Susan Dell |
| Any other child under 18 | No seed money, but the account is still there |
The Dell gift is a private pledge of $6.25 billion, not a federal benefit, so its timing depends on the Dells and Treasury. A child born in December 2024 falls in the Dell group, not the $1,000 group. That birth-date edge is still the question I get most.
Who Can Put Money In, and How Much
The limits for 2027 are the same as 2026. The law adjusts them for inflation only after 2027.
| Source | Annual limit | Counts toward the $5,000? |
|---|---|---|
| Parents, grandparents, friends (combined) | $5,000 | Yes |
| Your employer | $2,500 per employee, tax-free to you | Yes |
| Treasury’s $1,000 and the Dell $250 | One time | No |
| Charities and state or local governments | Set by the program | No |
The $5,000 is per child, not per giver. Two grandparents each sending $3,000 would put the account over, so decide who gives what before December.
Here’s what the full amount can grow to. Rosa and Kevin’s son was born in March 2026. They put in $200 a month, and Kevin’s employer adds $2,500 a year, so $4,900 goes in each year on top of the $1,000.
At a 7% average return, that reaches about $170,000 by his 18th birthday. About $43,000 of it is Rosa and Kevin’s own after-tax money. The rest is the seed, employer money and growth, and that split matters later.
Get Trump Account rule changes by email
Treasury is still writing the rules on rollovers, and the first inflation-adjusted limits come for 2028. I post each change when it lands.
Free. You’ll get my new posts, including these updates. Unsubscribe anytime, and check your spam folder for the confirmation email.
What the Money Is Invested In
Until the year your child turns 18, the account can only hold mutual funds or ETFs that track a broad U.S. stock index, such as the S&P 500. Fees are capped at 0.10% a year, and leverage isn’t allowed.
In the Treasury app, new money goes into a default qualifying index fund automatically. There are no individual stocks, bonds or crypto. For an 18-year horizon, all-stock is a reasonable default, but a bad market year shortly before 18 hits the balance hard.
Rules for moving the account to another brokerage are still being written. Until then, the Treasury-run account at BNY, with Robinhood as the broker, is the only home for it.
The Tax Catch: At 18 It Becomes a Traditional IRA
No withdrawals are allowed before January 1 of the year your child turns 18. From then on, the account is treated as a traditional IRA, and your child controls it.
When money comes out, it’s taxed in layers:
- Your after-tax contributions come back tax-free, since you already paid tax on them.
- Earnings, the $1,000 seed, Dell money and employer contributions are taxed as ordinary income.
- A 10% penalty applies before age 59½, unless an IRA exception fits: college costs, up to $10,000 toward a first home, or up to $5,000 for a birth or adoption.
Older coverage of this program, including an earlier version of this page, said qualified withdrawals would get capital-gains rates. That was in the House bill but not the final law.
For Rosa and Kevin’s son, roughly $127,000 of that $170,000 would be taxable as income when withdrawn. A Roth conversion in a low-income year, such as his first year out of school, may be one way to soften that. The IRS has said more guidance is coming.
Should You Add Your Own Money?
Take the free $1,000 and any employer contribution. For dollars from your own pocket, compare the options:
| Trump Account | 529 plan | Custodial Roth IRA | |
|---|---|---|---|
| Needs child’s earned income | No | No | Yes |
| Tax on growth for main use | Ordinary income | None for education | None after 59½ and 5 years |
| State tax deduction | No | In many states | No |
| Best for | Free money, employer dollars | College | Teens with a paycheck |
If college is the goal, my 529 plan rules usually win. Once your teen earns money from a job, a custodial Roth under the Roth IRA limits beats both on taxes.
Where the Trump Account wins is flexibility with no earned-income requirement. It also suits grandparents who want to give without picking a 529 plan.
Mistakes I’m Seeing Since Auto-Enrollment
- Assuming auto-enrollment means you’re done. An unclaimed account can’t take contributions, and the $1,000 still needs its own election.
- Filing a second account request. If Treasury already opened one, a new Form 4547 to open another isn’t needed. Check the app first.
- Typos in Social Security details. A mismatched name or birth date sends you a CP318 notice and delays everything.
- Going over the $5,000 cap across relatives. It’s one limit for everyone combined, employer money included.
- Forgetting the kiddie tax link. The account itself isn’t taxed each year, but it doesn’t change the kiddie tax rules on your child’s other investments.
What I’m Watching for 2028
The first inflation increase to the $5,000 and $2,500 limits applies to 2028. The IRS usually publishes its yearly adjustments in October or November, so I expect the 2028 figures in fall 2027.
Treasury also still has to finish the rules for rolling accounts to other brokerages. And more than 50 companies have pledged employer contributions, so check your open enrollment materials for a Trump Account benefit.
If you’re still planning for a baby, my post on whether you can afford to start a family covers the first-year budget. For older kids, how to teach kids to invest shows how to use the account as a lesson. I’ll update this page as each rule is finalized.
