The IRS has now outlined the process for opening a child's initial Trump Account, giving families and guardians a clearer path to establishing these new savings vehicles.

 

To open a Trump Account, an authorized individual must submit an election, generally using Form 4547 or the IRS's electronic filing process. The election itself creates the initial account and is separate from an income tax return, although both may be submitted at the same time. Importantly, only the first election processed for a child will be accepted.

 

Children are generally eligible if they have not reached age 18 by the end of the year the election is made, have been issued a Social Security number before the election date, and otherwise meet the requirements under the law. Elections must be submitted no later than December 31 of the year the child turns 17.

 

The proposed rules establish who may make the election. If no pilot-program contribution is being requested, priority generally follows this order: legal guardian, parent, adult sibling, and then grandparent. The individual making the election must certify, under penalties of perjury, that they are authorized to do so.

 

Families should note that opening a Trump Account is not the same as funding it. Contributions generally cannot be made until July 4, 2026. Additionally, an existing IRA cannot simply be redesignated as a Trump Account; the account must be created through the prescribed election process.

 

For eligible children born between 2025 and 2028, the same Form 4547 or electronic filing process may also be used to request the program's one-time $1,000 pilot contribution. While the election to open the account and the pilot-program election are separate actions, they can be completed together. Any approved pilot contribution will be deposited into the child's Trump Account after the account has been established and verified.

 

Another important feature of Trump Accounts is the annual contribution limit. During a child's growth period, generally before the calendar year they turn 18, nonexempt contributions are limited to $5,000 per year for 2026 and 2027, with future increases indexed for inflation. This limit applies to aggregate contributions made by parents, relatives, the child, and certain employer contributions. However, several important deposits do not count toward the annual cap, including the one-time $1,000 pilot contribution, qualified general contributions, and qualified rollover contributions. Families should also note that contributions are counted in the year they are actually made and cannot be retroactively applied to a prior year. Trustees are required to monitor contribution levels and prevent excess contributions from being accepted.

 

The person who files the election generally becomes the account's "responsible party," allowing them to make certain decisions on behalf of the child until the child reaches legal capacity.

 

Families interested in establishing a Trump Account should review eligibility requirements carefully and consider filing sooner rather than later, as only the first processed election for an eligible child will be recognized. 

 

Read also “Trump Accounts: A New Child Savings Option Under the One Big Beautiful Bill Act”  https://www.fawcasson.com/news2/Trump-Accounts-A-New-Child-Savings-Option-Under-the-One-Big-Beautiful-Bill-Act.htm