In short, 530A accounts are a new type of individual retirement account (IRA) for eligible children. Unlike a standard IRA, 530A accounts can be opened for a child under the age of 18 and do not require the child, who is the account owner, to have earned income.
Starting in 2026, “all U.S. children under age 18 with a valid Social Security Number are eligible to establish a 530A (Trump) Account. Parents or legal guardians can open and manage accounts on behalf of their children. (trumpaccounts.gov). Accounts can be opened by using IRS Form 4547, which is available when filing taxes.
There will be a pilot program that contributes $1000 from the federal government to account for eligible children born between January 1, 2025, and December 31, 2028. The maximum contribution amount is $5000 annually. Contributions can be made by parents and legal guardians, family members, friends, and employers. These contributions are not tax-deductible, so they will not reduce the contributor’s tax liability.
The account is fully in the child’s name, and parents & legal guardians are the sole custodian until the child turns 18 years old. The money in the account will be invested in a broad set of American companies through a “low-cost index fund” that has a focus on long-term growth. Money cannot be withdrawn before January 1st of the calendar year in which the child turns 18 years old. At that point, the account is treated as a traditional IRA and is subject to the same rules, which means that money could then be used for qualified expenses such as education, a first-time home purchase, or starting a business.
To start with, parents or legal guardians need to complete IRS Form 4547 when filing their taxes. The accounts will be funded after July 4, 2026. Parents/legal guardians should receive an email to get the account information. A financial institution will receive the funds and activate the account. Final rules and regulations for 530A accounts will be published later.
As with any type of investment account, account owners will be able to log into the account to view the account balance. Once the account owner turns 18, they will still be able to contribute to the account.
Resources
- TrumpAccounts.gov, Official Website.
- Treasury, IRS issue guidance on Trump Accounts established under the Working Families Tax Cuts; notice announces upcoming regulations, U.S. Internal Revenue Service.
