Tax filing season is a good time to open a Trump Account

Income tax filing season is in full swing and it’s a good time for parents to open a Trump Account for their children who are eligible.

Ksenia Yudina is a financial advisor and founder of Mostt, a family-focused investing platform. She discussed with InsuranceNewsNet how parents can enroll their eligible children in a Trump account and what children can do with the funds.

Trump Accounts (or American Birthright Accounts) are a federal program for children born between 2025 and 2028, providing a $1,000 Treasury-funded investment for each child. Parents can open these accounts via IRS Form 4547 or an upcoming online portal available in summer 2026.

Income tax filing season is a good time for parents to open a Trump Account by filing Form 4547 at the same time they file their tax return, Yudina said. Information about the accounts is available online but the portal to open an account won’t be active until July.

Yudina provided some details about who is eligible for a Trump Account.

“All children under age 18 are eligible for a Trump Account,” she said. “All they need is a valid Social Security number. The custodian – parent or guardian – can open the account on their behalf. Children born on or after Jan. 1, 2025, through Dec. 31, 2028, will receive an additional $1,000 bonus from the government to boost their savings.”

Parents, family members and other may contribute up to $5,000 a year into a child’s Trump Account, she said. In addition, the parent’s employer also may contribute up to $2,500 a year against the $5,000 annual limit into an eligible child’s Trump Account.

What makes Trump Accounts unique

“The interesting fact about the employer contributions is that employers can contribute to the employee’s child’s account up to $2,500 a year, and that contribution will not count toward the employee’s taxable income,” Yudina said. “So this is similar to a 401(k) account, and this what makes the accounts unique, compared to traditional custodial accounts like a 529 plan.”

Another unique feature of Trump Accounts, Yudina said, is that they can be used for more than an education.

“Unlike a traditional 529 account that is used for qualified educational expenses, the funds in a Trump account can be used for education, a first home purchase or even starting a business. And when the child turns 18, the child can take control of the account, and they can either spend the funds on education, a first home purchase or starting a business without any penalties or they can choose to convert the account to a Roth IRA, which also is tax-beneficial.”

Trump Accounts grow tax-deferred, similar to a traditional IRA. But after the beneficiary of the account reaches age 18, the child becomes responsible for the funds, so they can decide whether to withdraw the funds, put the money toward qualified expenses or convert the account into their own Roth IRA.

Parents must be aware that the account transfers to the child’s control when the child reaches age 18, Yudina said.

“It does posses a certain risk. If children are not financially savvy, they can perceive this money as available for spending versus long-term savings. So it’s important to educate children about the importance of long-term investments and financial literacy so they fully understand the power of compounding and the eligible uses of Trump accounts.”

Yudina advised parents of Trump Account-eligible children to do three things now.

“The first is to file the IRS Form 4547 when they file their 2025 tax return. Doing this will ensure that the account is ready to receive contributions when funding opens in July. Second, parents can check with their employer to see whether the company is making contributions to these accounts. And last, they can create a list of friends and relatives who might be interested in contributing to this account, so they can prepare the ‘village’ when the account is open.”

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