IRS Proposes Rules for ‘Trump Accounts’

The Internal Revenue Service proposed new rules governing so-called “Trump Accounts,” tax-advantaged investment accounts for children created under a large 2025 tax law. The proposals include details on how families will be able to open the accounts and how some children born during President Donald Trump’s second term may receive a one-time $1,000 federal contribution.

The proposed regulations, released Friday in two notices of rulemaking, laid out the mechanics of establishing the accounts and implementing a related pilot program that would deposit $1,000 into accounts for certain eligible children.

The accounts, also known as 530A accounts after the tax code section that created them, were authorized under 2025’s One, Big, Beautiful Bill Act, which added new provisions to the Internal Revenue Code to encourage early savings and investment for minors.

Under the proposal, a Trump Account would function as a special type of traditional individual retirement account established for the benefit of a child. The accounts could be opened for individuals younger than 18 who have a Social Security number and whose parent, guardian or other authorized adult elects to create the account.

The Department of the Treasury would formally create the initial account after receiving the election, with the adult who made the request typically serving as the responsible party managing the account on the child’s behalf.

According to the IRS, elections could be made using a new Form 4547 or through an online application. The election could be filed at the same time as a federal tax return or separately.

The accounts are designed to accumulate investments while the beneficiary is a minor. During what regulators call the “growth period”—from the account’s creation until the end of the year the beneficiary turns 17—special rules would govern contributions, investments and withdrawals. After that period, the account would generally follow the same rules as a traditional IRA.

Proposed Rule Addresses Pilot Program Mechanics

The second set of proposed regulations details a pilot program that would provide a one-time $1,000 government contribution to the accounts of children who are U.S. citizens with a Social Security number and born between 2025 and 2028.

A parent or another eligible adult could trigger the payment by making a pilot-program election for the child. Once processed, the IRS would treat the child as having made a $1,000 tax payment and refund that amount directly into the child’s account as a government contribution.

According to the IRS, the contribution cannot be reduced to pay debts or other federal offsets and must be deposited directly into the child’s account. If the child does not have an account established, the payment cannot be issued.

Trump Accounts would also allow additional contributions from individuals, employers, governments and nonprofit organizations. In general, contributions would be limited to $5,000 annually, though certain government or nonprofit contributions made through the Treasury would not count toward that limit. Contributions of up to $2,500 per year from an employer to an employee or their dependent would not be included in the employee’s income. Contributions to a Trump Account, including contributions from friends or family members, are nondeductible contributions and count toward the $5,000 annual contribution limit, according to the proposed regulations.

Trump has repeatedly talked up contributions from billionaire Michael Dell, among others, and some large employers that have pledged to match the government’s $1,000 in seed money. It is unclear, however, how many employers will match contributions to the accounts.

Regulators proposed that investments in the accounts would need to track a broad index of U.S. equities, avoid leverage and keep annual fees less than 0.1%. 

The proposals do not provide any further details about investments in the 530A accounts. The draft regulations regarding setting up a 530A account states that additional requirements related to contributions, investments, distributions, reporting, and coordination with IRA rules “are expected to be proposed in the future.”

Both proposed rules are scheduled for publication in the Federal Register on March 9, with a 30-day comment period for the pilot program and 60-day comment period for the accounts’ rulemaking.