02/19/2026
𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗧𝗮𝘅 𝗕𝗲𝗻𝗲𝗳𝗶𝘁𝘀 𝗼𝗳 𝗧𝗿𝘂𝗺𝗽 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝘀?
A new tax-advantaged savings account introduced by the One Big Beautiful Bill Act is the 530A account, or as its referred to in the IRS code, “Trump accounts.” Despite the political overtones, I believe these accounts offer some great tax advantages that will benefit many.
𝗪𝗵𝗮𝘁 𝗔𝗿𝗲 𝗧𝗿𝘂𝗺𝗽 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝘀?
A Trump account is a custodial savings account for minors that combines features you’d typically find in custodial investment accounts, retirement plans, and education savings vehicles, but without many of the income caps or usage restrictions that usually come with them.
Parents or employers can contribute up to $5,000 per year, and the money grows tax-deferred. What makes these accounts distinctive is their flexibility: funds can be invested in eligible index funds and later accessed in ways that may be highly tax-efficient, depending on how they’re used after the child turns 18.
Trump accounts are expected to launch in July 2026.
𝗪𝗵𝗮𝘁 𝗔𝗿𝗲 𝘁𝗵𝗲 𝗧𝗮𝘅 𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲𝘀?
• Seed funding for eligible birth years – Currently, children born between 2025 – 2028 will receive an initial $1,000 government-funded contribution into the account.
• Private foundation and grant participation – Because these accounts are structured as custodial savings vehicles for minors, they are eligible to receive contributions from third parties. Some organizations, like The Michael & Susan Dell Foundation, have indicated interest in making grants into these accounts for qualifying families. This creates the possibility that outside funding—not just parent contributions—can help grow the account over time.
• Potential employer deduction – Employers will be able to contribute to these accounts on behalf of employees’ children. The company will receive a tax deduction, and the contribution will not be taxable income to the employee.
• Roth conversion opportunity at age 18 – Once the child has earned income, they can convert the account to a Roth IRA, likely at the lowest tax rates of their career.
• No kiddie tax on growth – Because the structure is not treated like a typical custodial brokerage account, the annual investment growth avoids being taxed at the parent’s rate.
• Long runway for compounding – Since money can be contributed regardless of how old the child or if they have earned income or not, Trump accounts can give parents even more years of growth & compounding to provide tax-deferred growth on the children’s funds.
• Planning flexibility – Funds are not restricted solely for one purpose. After age 18, children can use the funds for education, purchasing their first home, starting a new business, and long-term investing.
𝗘𝘅𝗮𝗺𝗽𝗹𝗲 𝗼𝗳 𝗣𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹 𝗧𝗮𝘅 𝗦𝗮𝘃𝗶𝗻𝗴𝘀:
1. Assume parents contribute $5,000 per year from birth to age 18 to a child’s account.
2. At an 8% average return, the account could grow to roughly $202,000 by the time the child reaches 18.
3. After age 18, the child converts the funds into a Roth IRA.
4. If the funds continued to be invested in the Roth IRA and earn 8% annually, by age 65 that Roth account would be worth approximately $𝟲.𝟭 𝗠𝗶𝗹𝗹𝗶𝗼𝗻!
This turns a relatively small childhood contributions into a lifetime tax-free asset.
𝗡𝗲𝘅𝘁 𝗦𝘁𝗲𝗽𝘀
1. Review the IRS’s guidance with your tax advisor to determine if this would be beneficial for your family
2. Go to Trumpaccounts.gov and sign up for email updates
3. Have your tax pro file a form 4547 with your 2025 tax return
4. The account will be opened for you later in 2026, & you will be notified
5. Speak with your employer to see if contributions will be available
6. Continue to watch for additional IRS guidance as we move forward in 2026
While not a “one-size-fits-all” solution, for many families with young children, steady cash flow, and a long time horizon, Trump accounts introduce a new planning lever that didn’t exist before. As guidance continues to develop, the key will be understanding how these accounts fit into your broader tax and estate planning strategy—and acting early to maximize the compounding advantage they offer!
