Trump Accounts Open This Month

A brand-new type of tax-advantaged savings account for children—called a Trump Account—opens for contributions on July 4, 2026. Created under the One Big Beautiful Bill Act (OBBBA), these accounts function similarly to a traditional IRA for minors and come with a valuable $1,000 federal seed contribution for eligible newborns. For small business owners, there is also an employer benefit worth understanding now.

Strategy: If you have employees with young children, consider whether to offer Trump Account contributions as a new workplace benefit. The contribution is tax-free to the employee, deductible by your business, and requires no payroll tax.

Here's the whole story: Trump Accounts are established under new IRC §530A. Any U.S. citizen child with a Social Security number who will be under age 18 as of December 31 of the year the account is opened is eligible. A parent or guardian opens the account through the online portal at trumpaccounts.gov, which goes live July 4, 2026.

The $1,000 government contribution. Children born between January 1, 2025, and December 31, 2028, are eligible for a one-time $1,000 federal pilot program deposit that does not count against the annual limit. As of late April 2026, more than 4 million children had been signed up for accounts, with 1 million claiming the $1,000 contribution. (IR-2026-42)

Annual contribution limits. Contributions from all private sources are capped at $5,000 per year per account for 2026 and 2027, indexed for inflation thereafter. Contributions are made with after-tax dollars and are not deductible. The account grows tax-deferred. When the child turns 18, the account transitions to a traditional IRA, and distributions are taxed as ordinary income.

The employer benefit. Under IRC §128, employers may contribute up to $2,500 per year to a Trump Account for an employee's dependent child. That contribution is excluded from the employee's W-2 income and is deductible by the employer. The $2,500 counts toward the $5,000 annual cap, so coordination matters when family members also want to contribute.

Employers offering this benefit must establish a written plan with nondiscrimination testing and employee notification requirements similar to dependent care assistance plans under IRC §129. Final IRS regulations are still pending, and the Department of Labor has indicated it will issue guidance on whether employer Trump Account plans constitute ERISA-covered welfare benefit plans.

Example: A dental practice with 12 employees offers a $1,000 Trump Account contribution for employees with children under 18. For an employee in the 22% bracket, the contribution is worth $220 in federal income tax savings—plus FICA savings for both parties. The practice deducts contributions as a business expense.

Caution: No contributions may be made before July 4, 2026, even if the plan document is already in place.

Tip: Accounts can be opened for any child under 18—though older children will not receive the $1,000 federal seed contribution.