If you like him, it is a Trump Account, else it is a Section 530A Account. Either way, establishing one of these accounts for a child provides an opportunity to grow wealth over the lifetime of the child. An added bonus for children born after December 31, 2024, and before January 1, 2029, is that they may be eligible for a one-time, government-funded $1,000.00 contribution to a properly established account.

The recently established program creates a new tax-advantaged savings vehicle designed to help children build long-term wealth beginning early in their lifetime. A Trump Account is a tax-deferred investment account authorized by the government for the benefit of a child under the age of 18. It is intended to function as a long-term savings and investment vehicle. Current funding rules permit up to $5,000.00 in annual contributions per child. The limit is expected to be indexed to inflation in the future. Generally, contributions are made with after-tax dollars.

What’s the catch on receiving the $1,000.00 government funding?

As with all government programs, certain steps need to be followed to establish an account. An Authorized Individual, usually a parent or a legal guardian, must complete and file Form 4547 to establish an account. An account may be established for children under the age of 18 who have a valid Social Security number for employment. To qualify for the $1,000.00 government-funded contribution, the child must:

  • have a valid social security number,
  • be a U.S. citizen,
  • live with the Authorizing Individual and be claimed as a dependent,
  • not have received a prior $1,000.00 government funding under the program, and
  • must have been born after December 31, 2024, and before January 1, 2029.

The child for whom an account is established is the owner of the account. Prior to turning 18, the Authorizing Individual is responsible for managing the account or selecting someone to take over their responsibilities to manage the account. The account must be invested in eligible investments during what is termed the growth period – until the child turns 18. Eligible investments generally consist of mutual funds or exchange traded funds (ETF) that track an index of primarily U.S. companies.

Additional funding for the accounts can come from various sources. Parents, Grandparents or other family members can make annual contributions up to prescribed limits. Of the $5,000.00 contribution limit, employers through a Section 125 cafeteria plan, may contribute up to $2,500.00 annually. That amount is excluded from the employees’ taxable income.

The Trump Account or Section 530A Account was created under the One Big Beautiful Bill Act in July 2025. The accounts can be used as an additional tax-advantaged savings vehicle along with 529 College Savings Plans and Uniform Gift to Minor Accounts and be part of an estate plan. Each type of account was designed for a specific purpose, and with certain advantages, depending on the goals of the individuals who establish the accounts. If the goal is to fund a child’s education, the better choice of account may be the 529 account. It has higher contribution limits – up to $19,000.00 per year and monies used for qualified education expenses are tax free. If the goal is to create a retirement savings account for a child, then the 530A account may be the appropriate choice.

One might ask – What’s the big deal? It’s only $1,000.00.

Well, it is $1,000.00 right now for those children who qualify for the government-funded contribution. However, if we were to compound the initial funding amount of $1,000.00 at 8% per year for 65 years (after all, the account is designed to be a long-term, wealth-accumulation account) that $1,000.00 grows to almost $148,000.00 by the time the child reaches 65 years of age. By most standards, that is a very nice gift.

Please contact us with your questions. We will be happy to help guide you on these accounts and explore how they may benefit your estate plan.