Overview
The One Big Beautiful Bill Act, signed into law on July 4, 2025, created Trump Accounts. This new type of traditional individual retirement account (IRA) is designed to create financial growth by allowing earnings to accumulate on a tax-deferred basis. These accounts are governed by a distinct set of rules during the years before the year in which an account beneficiary attains age 18 (i.e., the growth period).
Eligibility and establishment
A Trump Account established for a U.S. citizen who has not reached the year in which he/she will attain age 18 can receive regular contributions, considering the child (i.e., account beneficiary) has a Social Security number.
The process by which a Trump Account can be established is convenient. A Trump Account may be elected by filing Internal Revenue Service (IRS) Form 4547 directly with the IRS or by submitting it on the Trump Accounts site. After an election has been made to establish an account, an activation process must be followed. It is important to note that Bank of New York Mellon (BNY Mellon) will act as the initial Administrator and has partnered with Robinhood Securities, LLC, which will act as the initial trustee and investment broker. Due to this, at this time all new accounts will be established through BNY Mellon and Robinhood.
Pilot program
A coordinated pilot program runs through December 31, 2028. For children born between January 1, 2025, and December 31, 2028, when an initial Trump Account is established, an election can also be made to have the U.S. Treasury Department make a one-time $1,000 deposit to the child’s account. For the child to qualify for the $1,000 pilot program contribution to his/her Trump Account, he/she must generally be a qualifying child of the individual opening the Trump Account, must be a U.S. citizen, and must have a valid Social Security number. Children born outside of the 2025–2028 timeframe are eligible for a Trump Account but are not eligible for the $1,000 contribution. These deposits commenced on July 4, 2026.
Contributions
Regular Contributions: Though a child’s parent (or other authorized individual) will initiate establishment of a new Trump Account, other individuals and nonindividuals may contribute to an existing account. During the growth period, contributions may come from multiple sources including government funding, nonprofit organizations, philanthropists and other individuals, and an eligible child’s employer or his/her parent’s employer.
The annual regular contribution limit on behalf of a child is generally $5,000, which is in addition to the one-time $1,000 pilot program contribution that is made by the Treasury Department to an eligible child’s account. Towards this annual limit, an eligible child’s employer or his/her parent’s employer may contribute up to $2,500 per employee (not per child). On August 11, 2026, the IRS issued proposed regulations with respect to employer contributions to Trump Accounts. This proposed rule provides initial guidance on nondiscrimination rules and other matters and is open for public commentary through September 25, 2026.
Trump Account custodians and trustees are required to actively enforce contribution limits, track sources of contributions and report them differently than what is required for standard traditional IRAs, and maintain accurate basis records, all of which is more complex than standard traditional and Roth IRA administration.
Transfers and rollovers: After an initial Trump Account is established, it can be moved by transfer or rollover in its entirety from Robinhood Securities, LLC, to a different custodian or trustee prior to the year in which the child will attain age 18, considering the new custodian or trustee meets the investment and expense requirements defined next. Once the account beneficiary reaches the year in which he/she will attain age 18, the account may be transferred or rolled over with fewer restrictions.
Investment and expense requirements
Investment options during the growth period are limited. Custodians and trustees may offer only low-cost, broad-based U.S. equity index mutual funds or exchange traded funds (ETFs) that meet strict criteria, including a specifically defined low expense ratio (i.e., 0.1%). Furthermore, custodians and trustees must implement controls to restrict investment choices, automatically invest idle cash, and continuously monitor funds for ongoing eligibility.
At launch, all contributions to Trump Accounts will be invested in the State Street SPDR Portfolio S&P 500 ETF (SPYM), a low-cost exchange-traded fund (ETF) that tracks the performance of the S&P 500 Index. The fund was selected to provide broad exposure to the U.S. stock market while maintaining expenses well below the statutory fee limitation. The U.S. Department of the Treasury has selected the following additional low-cost index ETFs as future permissible Trump Account investments:
- iShares Core S&P 500 ETF (IVV)
- Vanguard Total Stock Market ETF (VTI)
- State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM)
- iShares Core S&P Total U.S. Stock Market ETF (ITOT)
Distributions
Distributions from a Trump Account are restricted before the account beneficiary reaches the year in which he/she will attain age 18. Exceptions to the rule include moving the entire Trump Account to a different custodian or trustee, correcting an excess contribution, or in the case of an account beneficiary’s death. These restrictions require custodians and trustees to watch for unauthorized distributions.
Reporting
From a servicing and reporting perspective, Trump Accounts are subject to unique reporting requirements during the growth period. Custodians and trustees must report detailed information to the IRS and account holders, including contribution amounts, sources of contributions, fair market value, account basis, and meet specific requirements for rollover reporting within 30 days. There are also penalties for failure to comply, which make data capture and reporting processes a key operational risk area.
After the year in which a beneficiary attained age 17 (i.e., attainment of the year in which he/she will attain age 18), most of the special restrictions fall away and the account begins to function similarly to a traditional IRA, including application of the standard distribution rules and tax treatment. However, it is important to clarify that the account does not automatically become a standard traditional IRA at that point. It remains a Trump Account even after the growth period, with certain permanent differences—including the inability to accept simplified employee pension (SEP) or Savings Incentive Match Plan for Employees of Small Employer (SIMPLE) contributions, and the requirement to track basis separately from other traditional IRAs. While account documents may allow for an automatic transfer into a standard traditional IRA at that point, this transfer must be explicitly provided for and physically completed; otherwise, the account continues as a distinct account type.
Summary
For custodians and trustees, Trump Accounts represent a new IRA variant requiring enhanced controls, stricter investment and distribution rules, and significantly more granular contribution tracking and reporting, especially during the pre-age-18 years (i.e., the growth period). Additionally, a clear process for handling a Trump Account’s transition to a standard traditional IRA should be understood and well documented, as this does not happen automatically. From an operational standpoint, custodians and trustees should view these accounts as highly controlled accounts with restrictions at least through an account beneficiary’s age 17 calendar year.
Internal Revenue Service Notice 2025-68 and the recently issued proposed regulations applicable to employer contributions provide many of the early details necessary to understand Trump Accounts. Interested parties can also navigate to the Trump Accounts site (see the Answers and News sections) to learn more.