Trump Accounts are a new type of tax-advantaged savings account for children under age 18. A parent, guardian, or other authorized individual may open and manage the account on behalf of the child until the child reaches adulthood. While the account is administered by an adult, the child is the account owner and beneficiary. Once the child reaches age 18, the account is generally treated as a traditional IRA.

Eligibility

Children under age 18 with a valid Social Security number are eligible for a Trump Account.

Additionally, children born between January 1, 2025, and December 31, 2028, who are U.S. citizens and meet program requirements, may qualify for a one-time $1,000 government-funded contribution when the required election is made on their behalf.

Contributions

Parents, family members, and other eligible contributors may contribute up to $5,000 annually to a Trump Account, subject to program rules and future inflation adjustments.

Employers may also establish a Trump Account contribution program and contribute up to $2,500 per year for an employee’s child or dependent. Employer contributions count toward the account’s annual contribution limit and, under current law, are excluded from the employee’s taxable income.

Tax Advantages

Trump Accounts are designed to provide tax-advantaged savings for the next generation. Contributions and earnings receive tax treatment similar to that of a traditional IRA, allowing investments to grow on a tax-deferred basis until distributions are taken.

Investment Requirements

Funds in Trump Accounts must be invested in eligible mutual funds or exchange-traded funds (ETFs) that track the S&P 500 or another approved index of primarily American equities.

Considerations for Employers

Organizations considering a Trump Account contribution program should review:

• Eligibility requirements for employees and dependents.
• Annual contribution limits and reporting requirements.
• Payroll and administrative processes needed to facilitate employer contributions.
• Ongoing IRS guidance as program implementation continues to evolve.

Getting Started

Parents or guardians can establish a Trump Account by completing the required election process with the IRS. The process generally requires the child’s Social Security number, date of birth, and other identifying information. For the most current requirements and guidance, visit the IRS Trump Accounts webpage or consult a qualified financial, tax, or benefits professional.

Partnering with Pierce Group Benefits

If your organization is interested in learning more about Trump Accounts or evaluating employer contribution opportunities, contact your PGB Account Executive or email partnership@piercegroupbenefits.com for additional guidance.