A new savings and investment program called Trump Accounts launched on July 4, 2026, creating tax-advantaged investment accounts for eligible children under the age of 18. The program is designed to help families begin building long-term savings early through a combination of government-funded contributions and optional private contributions. While additional IRS and Treasury guidance is still expected, here’s a quick overview of how the program is expected to work.

Who is eligible?

Based on current guidance, U.S. citizen children under age 18 with a valid Social Security Number may be eligible to establish a Trump Account. The Trump Account is fully in the child’s name. Parents or legal guardians will open and manage the account on the child’s behalf. The account is expected to remain under custodial control until the child turns 18.

Additionally, children born between January 1, 2025, and December 31, 2028, may qualify for a $1,000 contribution from the U.S. Treasury to help establish the account.

How do Trump Accounts work?

Trump Accounts are intended to function as long-term investment accounts focused on market-based growth over time. Current program details say:

• Families may contribute up to $5,000 per child annually. Contributions are not tax deductible.
• At launch, all accounts are automatically placed in the default State Street SPDR Portfolio S&P 500 ETF (SPYM) and will be managed by BNY, in partnership with Robinhood. Additional investment options from Vanguard and iShares will be available.
• Employers with qualifying plans can contribute up to $2,500 per employee per year, which count against the $5,000 annual limit. Employer contributions are tax free to the employee and tax deductible to the employer.
  • Alternatively, “Cafeteria Plan” pre-tax options could be available.
• Contributions from charities and governments are not expected to count against the $5,000 annual limit.
• No ongoing contributions are required to maintain the account.

Because funds are invested in market-based investments, account values may fluctuate over time. Program administrators have also indicated that families will likely be able to monitor account activity and investment performance through an online platform.

How are funds used?

Once the child reaches age 18, the Trump account acts similarly to a traditional IRA. Taking distributions before reaching age 59 ½ will incur a 10% penalty unless used for an excepted purpose, including:

• Education expenses
• First-home purchases
• Birth and adoption expenses

Certain withdrawals may still be subject to ordinary income taxes or additional restrictions. Tax consequences will vary based on the nature of the annual contributions.

How do families enroll?

Enrollment occurs through a new IRS Form 4547, either:

• By filing a tax return, or
• By using an online election process available through TrumpAccounts.gov

Additional enrollment and activation guidance is expected as the program rolls out. Initial activation emails will only come from no-reply@TrumpAccounts.Treasury.gov.

Plan for Your Family’s Future with Lutz

Additional IRS and custodian guidance is still developing, and these accounts may not be appropriate for every family. Understanding the contribution rules, potential tax implications, and how these accounts compare to other savings options like 529s can help families make more informed decisions. If you have questions about how these accounts may fit into your family’s financial picture, please contact us to learn more.

• Futuristic, Achiever, Discipline, Communication, Woo

McKenzie Haase

Tax Manager

McKenzie Haase, Tax Manager, began her career in 2019. She has progressed from an intern to her current position, acquiring in-depth taxation experience. McKenzie is actively involved in business development initiatives, demonstrating her commitment to growing Lutz and investing in the firm's future success.

Specializing in tax consulting and compliance, McKenzie focuses on the real estate and services industries. She collaborates closely with individuals and businesses and other departments to provide strategic planning and consulting services. At Lutz, McKenzie's futuristic outlook and disciplined approach enable her to anticipate potential financial implications and develop proactive solutions for clients.

 

McKenzie lives in Omaha, NE with her husband Ty, and their yellow lab, Maya. Outside the office, she golfs, runs, and attends sporting events.

402.778.7965

MHaase@lutz.us

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Daniel Sweeney

Tax Director

Dan Sweeney, Tax Director, began his career in 2016. With both a JD and Tax LLM degree, he has built comprehensive expertise while leading the firm's specialty tax offering. 

Leveraging his extensive technical knowledge, Dan specializes in nonprofit, estate, and international tax matters. He excels at translating intricate tax rules into practical applications, ensuring compliance across various sectors. His consultative approach, attention to detail, and ability to find actionable solutions help clients confidently navigate complex regulations. 

 

At Lutz, Dan's passion for learning and thorough research skills have made him a go-to expert in the firm. His intellectual approach to problem solving and deep understanding of tax law continues to elevate the firm's tax practice. 

 

Dan lives in Omaha, NE, with his wife Jillian and son Mark. Outside the office, he can be found reading up on ancient history and taking walks in nature with his wife. 

402.463.8988

dsweeney@lutz.us

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