December 4, 2025
The IRS and Treasury have issued the first round of guidance on Trump Accounts in Notice 2025-68. This offers the earliest look at how the new accounts will function when they launch in 2026. Created under the One Big Beautiful Bill Act (OBBBA), Trump Accounts are designed as long-term retirement savings vehicles for children. The program includes a highly anticipated $1,000 federal contribution for eligible children born between 2025 and 2028, provided a parent or guardian elects to open an account. The new guidance explains how those elections will be made, how contributions will be tracked, and what investment options will be allowed during a child’s early years. To help clients, prospects, and others, Wilson Lewis has summarized the key details below.
Trump Accounts are a new subtype of traditional IRA created specifically for minors. They operate under a set of special rules during the growth period, which lasts until the year the child turns 18. During this time, Treasury may open and maintain one account per qualifying child once a parent, guardian, or other eligible individual makes an election.
A “qualifying child” for purposes of opening a Trump Account is any minor who meets the program’s identification and citizenship requirements and has a valid Social Security number included with the election. There are no birth-year restrictions for opening an account; any eligible minor may have one Trump Account.
The $1,000 pilot program contribution applies to a narrower group. To receive the federal deposit, a child must be a U.S. citizen born between January 1, 2025, and December 31, 2028, have a Social Security number, and have no prior pilot election made on their behalf. In other words, many minors may qualify for a Trump Account, but only children born within this four-year window are eligible for the $1,000 federal contribution.
What they are not:
Trump Accounts are not 529 plans, traditional savings accounts, or Roth IRAs. Withdrawals are almost entirely prohibited before adulthood, and the accounts cannot accept SEP or SIMPLE contributions even after the beneficiary turns 18. Investment options are also limited; the guidance specifically states that investments are generally limited to mutual funds or exchange traded funds (ETF).
Eligibility and Account Setup — A Trump Account may be opened only after an eligible individual elects to create the account using Form 4547 (still in draft form) or the upcoming portal. Responsibility follows a priority order: legal guardian, parent, adult sibling, and then grandparent. Elections may begin in 2026, and contributions can start on July 4, 2026.
Contribution Rules — The notice goes over several contribution types available during the growth period. This includes the one-time $1,000 federal pilot contribution for eligible children. Families may also make annual personal contributions of up to $5,000 (indexed after 2027); these contributions are not deductible. Employers may contribute up to $2,500 per employee for dependents under a new program, and those amounts apply toward the $5,000 annual limit. In addition, qualified general contributions from governments, tribes, or 501(c)(3) organizations may be made to broad groups of children, such as those in a specific geographic area or birth cohort.
Eligible Investments — During the growth period, investments are limited to mutual funds or ETFs with an index of mostly domestic companies. There cannot be annual fees or expenses of more than 0.1%.
Distribution and Rollover Rules — Withdrawals are prohibited before age 18, with only narrow exceptions such as rollovers to another Trump Account, corrections of excess contributions, or an ABLE rollover during the year the child turns 17. Hardship withdrawals are not allowed. When the child reaches adulthood, the account becomes a traditional IRA. Funds can be withdrawn at that point, but distributions taken before age 59 1⁄2 may have a 10% penalty; exceptions generally include qualified higher education expenses or a first-time home purchase.
Reporting — During the growth period, trustees (guardians, parents, etc.) will need to follow reporting requirements using Form 1040. This includes listing total contributions, the source of these contributions, account value, and any rollovers. When the growth period ends on January 1 of the year the child turns 18, then standard IRA reporting is required.
Contact Us
With Notice 2025-68, families and employers now have a better sense of how Trump Accounts will work and how to prepare as the election period nears. Stay alert for additional guidance ahead of the July 4, 2026, launch to make the most of this new savings’ vehicle. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.