Trump Accounts: The New Tax-Advantaged Savings Accounts for Children
Part of our 2025 Tax Law Changes guide — the complete breakdown of the One Big Beautiful Bill Act.
Among the newest features of the 2025 One Big Beautiful Bill Act is a new tax-advantaged account for minors — commonly called a “Trump Account.” It is designed to give children a long-horizon, tax-favored place to build savings.
How they work
- Eligibility: accounts for children under 18, opened by a parent or guardian.
- A federal seed contribution (around $1,000) for children born during a defined window (roughly 2025 through 2028).
- Annual contributions up to a capped amount (in the neighborhood of $5,000 per year) from family, and potentially employers.
- Tax-deferred growth, with favorable treatment on qualified withdrawals used for purposes such as education, a first home, or starting a business.
Where they fit
Trump Accounts do not replace 529 plans or custodial Roth IRAs — each still has a role. For education specifically, a 529 remains hard to beat; for earned-income children, a custodial Roth is powerful. The new accounts add another option, particularly attractive for the newborn seed money and for general-purpose (non-education) goals.
Advisor takeaways
Confirm the current contribution limits, the exact birth-year window for the seed money, and the qualified-use rules before advising families — the mechanics are new and subject to IRS guidance. For clients with young children, make sure they at least claim the seed contribution where eligible.
This article is educational and current as of its publication date. Federal tax provisions — dollar thresholds, phase-outs, and effective dates — change frequently and many items here are temporary. Confirm the current statute, IRS guidance, and your client’s facts before relying on any point below. Not legal or tax advice.
