Trump Account Program : The federal government’s new “Trump Account” program — an investment account initiative for American children — just received the largest philanthropic contribution of 2024. Billionaires Michael and Susan Dell announced a $6.25 billion donation on GivingTuesday, giving the program a historic financial lift and raising new questions among parents: Who qualifies, how do you claim the account, and when does the money actually arrive?
Here’s a detailed breakdown of how the program works, who is eligible, and what families need to do to claim their children’s accounts when the system officially launches in 2026.
What the Trump Accounts Are Designed to Do
The Trump Account initiative was included in the president’s sweeping legislative package known as the “One Big Beautiful Bill”. The goal is simple but ambitious:
Give every American child the opportunity to build long-term wealth through early stock market exposure.
Under the law, eligible children can receive:
- A U.S. Treasury-funded $1,000 deposit (for specific birth years)
- A Dell-funded $250 incentive deposit (for children age 10 and younger)
- Up to $5,000 in annual contributions from parents, guardians, or others
- Up to $2,500 in employer contributions, counted toward the same $5,000 cap
Unlike typical children’s savings programs, the Trump Accounts must be invested in a broad-market index fund, similar to a total stock market ETF. The aim is to provide passive, long-term growth with minimal risk concentration.
Why the Dells’ $6.25 Billion Donation Matters
Michael Dell, the founder of Dell Technologies, said the family wanted to support a national effort to build “hope, opportunity, and prosperity for generations.”
Their donation will provide $250 contributions for 25 million children, designed to incentivize families to open their accounts early and start contributing.
This scale of private funding is unprecedented in U.S. children’s financial programs, rivaled only by state-level baby bond initiatives.
Who Qualifies for the Initial $1,000 Treasury Deposit
The federal government will deposit $1,000 automatically, but only for children born in a specific window:
✔ Babies born between Jan. 1, 2025, and Dec. 31, 2028
This deposit does not count toward the annual contribution limit, and families must actively elect to receive it using IRS Form 4547.
Eligibility: Which Children Can Claim a Trump Account?
Age Requirements Under Federal Law
According to the law:
- Any American child under 18 with a valid Social Security number is eligible
- Citizenship or legal residency criteria follow standard IRS-dependent rules
- Children age 0–17 can have accounts created by a parent or legal guardian
Criteria for the $1,000 Starter Deposit
To receive the U.S.-funded $1,000:
- The child must be born between 2025 and 2028
- Parents must file IRS Form 4547 to elect the account
- The deposit arrives only after account activation, expected mid-2026
Requirements for the Dell-Funded $250 Incentive
The Dell-funded $250 applies to:
- Children age 10 and younger
- Regardless of birth year (as long as under 10)
- Regardless of income
- Regardless of whether they qualify for the $1,000 Treasury deposit
This means a 3-year-old in 2026 or a 9-year-old in 2026 could receive the $250.
How to Claim a Trump Account for Your Child
Step-by-Step Process Using IRS Form 4547
For most families, claiming a Trump Account will follow this sequence:
- Download or receive IRS Form 4547
The form will be available for the 2025 tax year. - Provide identifying information
- Child’s name
- Social Security number
- Parent/guardian information
- Elect to establish the account
This step authorizes the Treasury to create the investment account on your child’s behalf. - Elect the $1,000 contribution (if eligible)
Families with 2025–2028 newborns can opt in to receive the deposit automatically. - Submit the form with or before your 2025 tax return
The IRS has clarified that the form can be filed at any time, not only during tax season.
When Will Parents Receive Activation Instructions?
Starting May 2026, the Treasury Department (or its authorized agent) will send:
- Authentication instructions
- Account activation details
- Steps to finalize the setup
Only after activation can families make contributions.
Key Program Dates to Know
| Event | Date |
|---|---|
| Eligible birth window for $1,000 deposit | Jan 1, 2025 – Dec 31, 2028 |
| IRS Form 4547 available | During 2025 tax season |
| Activation instructions sent | May 2026 |
| Official program launch | July 4, 2026 |
| Contributions allowed | Beginning July 4, 2026 |
The July 4 timeline was chosen symbolically for the 250th anniversary of U.S. independence.
Contribution Rules, Annual Limits, and Investment Structure
Parent, Guardian, and Employer Contribution Limits
Each Trump Account can receive:
- Up to $5,000 per year from parents, grandparents, or any individual
- Up to $2,500 from employers, but this counts toward the same $5,000 cap
- Rollover contributions are not allowed — the funds must be new deposits
The $1,000 Treasury deposit and $250 Dell deposit do not count toward the limit.
How Contributions Are Invested
All money deposited must go into a broad-based index fund that tracks the overall U.S. stock market.
This approach:
- Reduces management fees
- Minimizes volatility from single-stock exposure
- Offers long-term growth potential similar to major index ETFs
The Treasury has not yet announced which specific index products will be used.
How Earnings Grow and When Withdrawals Are Allowed
The account grows tax-advantaged until the child turns 18. At that point, it automatically becomes a traditional IRA, shifting to standard retirement-account rules.
What Happens When a Child Turns 18?
Conversion to a Traditional IRA
Upon reaching age 18:
- The Trump Account becomes a standard traditional IRA
- Earnings continue to grow tax-deferred
- Future contributions follow IRA rules
Allowed Uses at Age 18
The child — now a legal adult — can withdraw money penalty-free for:
- Education expenses
- First-time home purchase
- Starting a small business
These categories mirror exemptions commonly found in existing federal tax law.
Tax Rules and Penalties for Non-Qualified Withdrawals
If funds are used for other purposes:
- Withdrawals may be taxed at a higher rate
- Early withdrawal penalties may apply
The aim is to encourage long-term asset building rather than short-term cash withdrawals.
What Parents Should Consider Before Claiming
Long-Term Benefits for Low- and Middle-Income Families
The Trump Accounts could significantly impact generational wealth, especially for:
- Families unable to save regularly
- Parents who want low-maintenance investment vehicles
- Children who need early financial footholds for college, housing, or business ventures
A child receiving the $1,000 deposit at birth — with additional contributions — could reach adulthood with a substantial balance thanks to market growth.
Potential Impact on College Financial Aid
The government has not announced how Trump Accounts will be treated under FAFSA rules, but historically:
- Custodial assets may reduce aid eligibility
- IRA-based accounts are assessed differently
Families should watch for updated Department of Education guidance.
Why Millions of Families May Miss Out Without Awareness
Programs requiring active enrollment often see lower participation from:
- Low-income households
- Non-English-speaking families
- Parents unfamiliar with IRS processes
The Dell donation aims to reduce this gap by offering upfront financial incentives.
Trump Account Program FAQ
Q : Who is eligible for a Trump Account?
Ans : Any American child under age 18 with a Social Security number is eligible. The $1,000 deposit applies only to children born between 2025 and 2028.
Q : How do parents apply for a Trump Account?
Ans : Parents must file IRS Form 4547 to establish the account and elect the $1,000 Treasury deposit if the child qualifies.
Q : What is the $250 Dell incentive deposit?
Ans : The Dell family donated $6.25 billion to provide a $250 deposit for 25 million children age 10 and younger, regardless of birth year.
Q : When do Trump Accounts officially launch?
Ans : The accounts become active on July 4, 2026, and contributions can begin on the same day.
Q : What happens to the account when a child turns 18?
Ans : It becomes a traditional IRA, and the child can withdraw funds for education, housing, or business expenses.
Q : How much can you contribute each year?
Ans : Up to $5,000 annually, including employer contributions.
Q : Can the money be withdrawn for any purpose?
Ans : Yes, but early withdrawals for non-qualified uses may be taxed at a higher rate.
