Trump Accounts Explained: The $1,000 Deposit, Form 4547 and the Rules

What is a Trump account?

A Trump account is a new kind of individual retirement account (IRA) for children, created by the 2025 tax law that the IRS calls the Working Families Tax Cuts (the One Big Beautiful Bill Act). It's set up under section 530A of the tax code. The IRS says a Trump account is a traditional IRA. It can't be a Roth IRA or a SIMPLE IRA.

A child can have one if they have a valid Social Security number and won't turn 18 before the end of the calendar year the account is set up. A parent, guardian or other authorized person is the "responsible party" who manages it until the child is an adult.

Most of the special rules apply only during what the IRS calls the growth period. That period ends on December 31 of the year before the child turns 18. The IRS's own example: a child born October 1, 2025 turns 18 on October 1, 2043, so the growth period ends December 31, 2042.

The $1,000 Treasury deposit (the "pilot program")

The federal government makes a one-time $1,000 "pilot program contribution" for a child who:

• was born after December 31, 2024 and before January 1, 2029,
• is a U.S. citizen with a Social Security number,
• is expected to be the qualifying child of the person making the election, and
• hasn't already had a pilot election processed.

The deposit isn't automatic. A parent or guardian has to elect it on Form 4547, which can be done through the Trump Accounts app or website, or through an IRS Individual Online Account. If you already requested it, you don't need to file again. Treasury deposits it once the account is confirmed open, and never earlier than July 4, 2026. The $1,000 doesn't count toward the $5,000 yearly limit.

Children born before 2025 can still have a Trump account if they're under the age limit. They just don't get the $1,000 pilot deposit.

Opening and claiming the account

1. Automatic enrollment. The IRS says that beginning October 1, 2026, Treasury automatically enrolled eligible children in Trump accounts. If your child was enrolled this way, you don't need Form 4547 just to open the account.
2. Claim and activate. You still have to claim and activate the account to manage it, through the Trump Accounts app or website. You'll verify your identity and your authority over the account. Names, Social Security numbers and dates of birth must match Social Security Administration records.
3. The $1,000 election. Auto-enrollment doesn't elect the pilot deposit. For an eligible child, the election is made on Form 4547.
4. Get help from the program. The IRS lists the program's help line as 866-USA-4547 (866-872-4547). The IRS FAQ also names the financial agent and the account trustee Treasury designated: see the IRS Trump Accounts FAQ.

The IRS confirms Form 4547 is an official IRS form. Be careful with texts, calls or emails asking for your child's Social Security number. Go directly to the IRS or the official program site instead of clicking links.

Who can contribute, and how much

During the growth period, money can go in even if the child has no earnings, which is different from a regular IRA. Nothing can be contributed before July 4, 2026.

Why basis matters later: basis is money that was already taxed. When the child takes money out as an adult, the basis part comes out tax-free and the rest is taxed as ordinary income. Keep records of family contributions.

How the money can be invested (the legal rule)

During the growth period, the law limits what a Trump account can hold. The IRS describes an eligible investment as generally a mutual fund or exchange-traded fund that tracks an index of mostly U.S. companies, doesn't use leverage and charges annual fees of no more than 0.1% of the balance. Treasury can set other criteria.

We're stating the rule so you understand the account. We don't comment on whether any investment is a good fit, and nothing here is a projection of what an account will be worth. Market investments can lose value.

Can money come out before 18?

Generally no. During the growth period the only distributions allowed are:

• a rollover of the entire balance to another Trump account for the same child,
• a rollover of the entire balance to the child's ABLE account, only in the calendar year the child turns 17,
• removal of excess contributions, and
• distributions after the child's death.

The IRS says trustees can't make hardship withdrawals during the growth period, and can't close the account and hand the money to the child.

What changes in the year the child turns 18

Starting January 1 of the year the child turns 18, most special rules stop, and the account is generally treated like any other traditional IRA. Per IRS Notice 2025-68, that means the regular IRA rules on contributions, distributions, required minimum distributions, rollovers, Roth conversions and ordinary income tax apply.

• Withdrawals are taxed as ordinary income, except the basis part (money the family already paid tax on).
• Before age 59½, the 10% additional tax on early distributions can apply unless an exception does. The IRS gives qualified higher education expenses and a first home purchase as examples of exceptions.
• Roth conversion is possible under the normal conversion rules once the growth period ends. The converted amount is taxable except for basis.
• Basis is figured within the Trump account only. The IRS says a Trump account is never combined with the person's other IRAs when working out the tax-free basis share of a distribution.
• Automatic move. The account agreement may say that, right after the growth period, the money moves automatically to a regular traditional IRA at the same trustee.
• Moving it to an employer plan: if the account has basis, it can't be rolled into an employer plan such as a 401(k). It can still move to another IRA.

Trump account compared with a 529 plan (definitions only)

People often search "Trump account vs. 529." They're different tools with different tax rules. This table lays out the definitions side by side. It isn't a ranking, and it doesn't say which one any family should use.

529 facts: IRS Tax Topic 313 and CHET's Connecticut tax page. CT's CHET deduction also lets you carry contributions over the limit forward for five years.

IRS and Treasury letters about Trump accounts

• Notice CP318 means you need to take another step to complete or fix a Trump account election. Follow the steps in the notice. If you resubmit Form 4547, make sure names, Social Security numbers and dates of birth match Social Security records.
• Don't file Form 1040-X to fix Form 4547, even if you sent Form 4547 with your tax return. The IRS says to follow the CP318 instructions instead.
• IRS phone staff can't fix an election or claim the account for you. To change information after you claim the account, the IRS points you to 866-USA-4547.
• A letter from Treasury may mean your child could qualify for the $1,000 deposit. It explains the steps to take.

For other notices, see IRS and CT tax letters explained or NCDOR letters explained.

What's still being settled

• Not yet confirmed Final regulations. IRS Notice 2025-68 says the IRS intends to issue regulations. Details could change when they're final.
• Not yet confirmed Connecticut and North Carolina tax treatment. We haven't found guidance from CT DRS or NCDOR on how each state treats Trump account contributions, employer contributions or later withdrawals.
• Limits after 2027 will be adjusted for inflation. The new figures aren't out yet.
• Not yet confirmed Final eligibility for private deposits such as the $250 gift described above.