Trump Accounts Initiative: How to Secure $1,000 for Your Child

American parents can soon receive $1,000 for their newborns through a provision in a recent law signed by former President Donald Trump. This initiative, known as “Trump Accounts,” aims to support financial savings for children born between 2025 and 2028. Parents can access this seed money by opening an account for their child, which will then be invested in the stock market.

Overview of Trump Accounts Initiative

The Trump Accounts initiative is designed to benefit over 14 million children expected to be born within this period. The White House describes these accounts as a way to provide children with a head start on saving for their future.

Eligibility for Trump Accounts

• Open to parents or guardians of any American child under 18.
• Must have a valid Social Security number.
• Available for babies born from December 31, 2024, to January 1, 2029.

Seed Money and Contributions

Each eligible child will receive an initial deposit of $1,000 from the U.S. Treasury upon setting up the account. While older children born before 2025 can establish a Trump Account, they will not receive the government-funded $1,000.

A notable contribution towards these savings accounts comes from billionaires Michael and Susan Dell, who donated $6.25 billion. This fund aims to provide an additional $250 for children under ten from families with a median income of $150,000 or less.

How to Establish a Trump Account

Parents can open a Trump Account when filing their taxes for 2025 or through an online portal expected to launch on July 5, 2026, at trumpaccounts.gov. They will need to complete Form 4547 to initiate the account. After the election, the Treasury will guide parents through an authentication process to activate the account.

Potential Growth of Funds

Once established, the $1,000 in a Trump Account will be invested in a diversified portfolio of low-cost index funds. According to estimates from the White House’s Council of Economic Advisers, a child’s account could grow significantly:

• With no additional contributions, the account could reach $5,800 by age 18.
• With regular annual contributions, the account might total up to $303,800 by the time the child turns 18.

Contributions and Tax Implications

Parents can contribute up to $2,500 per year from pretax income, similar to retirement accounts. Additionally, employers can contribute the same amount without affecting taxable income.

Annual contributions are capped at $5,000, but donations from governments and charities are excluded from this limit. Notably, contributions to the Trump Accounts are not exempt from the gift tax annual exclusion. Consequently, donors will need to file IRS Form 709 for any contributions made.

Conclusion

The Trump Accounts initiative presents a significant opportunity for parents to secure financial support for their children’s future. By taking advantage of this program, families can help cultivate long-term savings and investment habits for the next generation.