Trump Accounts: Explained

Established Under the One Big Beautiful Bill

June 19, 2026

It’s been almost a full year since the One Big Beautiful Bill Act (OBBBA) was signed into law, and many of you have felt its impact through reduced taxation of overtime & tip income, an enhanced senior deduction, or one of the other numerous updates introduced by the bill. One item that was introduced, but not yet fully put into effect, was the addition of a new type of tax-advantaged account called “Trump Accounts”. To better understand how these accounts work, and how you could use them to benefit your family, we’ve provided a list of their most important characteristics below:

• Children born January 1, 2025, through December 31, 2028, are entitled to a $1,000 contribution from the government into their Trump Account.

• Trump Accounts can be opened at no charge for any child prior to their age 18 via Form 4547, easily accessible at www.Trumpaccounts.gov. These accounts cannot be funded until a tentative date of July 4, 2026.

• From a tax perspective, these accounts operate similar to after-tax vehicles. Contributions are made with post-tax dollars, withdrawals of basis (contributions) are tax-free, and any growth is taxable as ordinary income at the time of distribution. In short, these are treated similar to non-deductible traditional IRAs prior to the child’s age of 18. Upon the child’s age of 18, it is unclear if the entire account would roll into a traditional IRA, or if contributions could roll into a Roth IRA and growth into a traditional IRA.

• Parents, grandparents, relatives, employers, and others can contribute, but the combined total contribution for that child is capped at $5,000 per year.

• No withdrawals can be made prior to the beneficiary’s age of 18.

• Investment options are limited to low-cost index funds or ETFs tracking a U.S. equity index (S&P 500, for example) with an expense ratio no higher than 0.10%.

• Interesting note: $1,000 invested in the S&P 500 index 18 years ago would be worth approximately $7,500 today.

While these accounts may make sense for you to utilize for your children, other savings vehicles such as 529 plans, UGMA/UTMA accounts, or taxable brokerage accounts in your name may be more suitable for your goals. If you or someone you know has any questions about these accounts and how they may be beneficial, please feel free to contact us or provide our information for others to do so. We can be reached at 610-422-3773 or www.maaplanning.com.

^{This material is for general information and educational purposes only and is not intended to provide specific advice or recommendations for any individual. Investing involves risk including the loss of principal. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Trump Accounts offer tax deferred growth on earnings. Family contributions are made with after tax dollars, and eligible employer contributions may be excluded from the employee’s taxable income. A one-time $1,000 federal contribution may be available for eligible children born between 2025 and 2028. Distributions are generally prohibited during the child's growth period and, once permitted, are taxable as ordinary income and may be subject to a 10% IRS early distribution penalty if taken before age 59½. Contribution limits and other restrictions apply, and some rules remain subject to future Treasury and IRS guidance. Consult a financial professional or a qualified tax advisor before making decisions.}