Trumps accounts, officially known as Section 530A accounts, are one of the newest tax-advantaged saving tools for parents or guardians to create for their children. Introduced under H.R. 1, the law known as the One Big Beautiful Bill Act (OBBBA), the savings accounts for children are a kind of IRA. How CPAs can advise families on coordinating these accounts was discussed in a joint episode of the Tax Section Odyssey and Personal Financial Planning (PFP) podcasts — “Trump accounts are coming — and you need to be ready.”
With more adults eager to maximize long-term planning strategies and set the children in their life up for financially secure futures, knowing the details is critical to advising clients for years to come.
What are Trump accounts?
Trump accounts can be established and contributed to at any point, through birth and until the child turns 18, giving them a clearly defined growth period. During this time, contributions accumulate tax advantages, and the structure is simple: long-term investment, low cost, and limited risk.
A child’s parents, legal guardian, adult sibling, or grandparent can open a Trump account by submitting IRS Form 4547, Trump Account Election(s), at any time before the child turns 18.
Contributions can reach up to $5,000 annually per child and can be made by persons beyond parents and grandparents. Employers, extended family, friends, and even eligible charitable organizations may give to the account. This extended circle requires extra considerations around coordination, tracking, and ensuring clients don’t accidentally exceed the annual limit.
Unlike other savings options, Trump accounts feature a federal pilot program contribution of $1,000 for children born between 2022 and 2028. To take advantage of this government contribution, taxpayers can opt in via Form 4547.
Although you can take advantage of Trump accounts when filing your 2025 returns, contributions and funding for the $1,000 deposit won’t start until July 4, 2026. You may want to counsel clients to submit Form 4547 with their 2025 tax return so the account is available in July.
No withdrawals can happen until the child turns 18, and upon the child’s birthday, the account transitions into a traditional IRA with basis — opening the door to long-term retirement strategies, including potential Roth conversions.
A timeline and insights into Trump accounts highlight key dates since the passing of H.R.1 and reference documents you may need as you navigate planning conversations with your clients.
Trump accounts: A different design than other savings options
Trump accounts join the lineup of other ways to save for a child’s future, including 529 savings plans, Uniform Transfers to Minors Act (UTMA) accounts, Roth IRAs, and ABLE accounts. But Trump accounts are distinct because of their unique design.
Although Trump accounts offer simplicity, they’re not as flexible as a 529 plan or Roth IRA. The Trump account funds may be invested only in eligible mutual funds or another index of primary American equities, according to guidance by the IRS. Your clients will likely need guidance on how to navigate the specific investment rules.
You may want to provide a comparison with other similar investment plans. For example, 529 plans are an ideal tool for education funding with tax-free qualified distributions. A UTMA account offers flexibility, but it does have drawbacks. With a UTMA account, children can receive contributions free of tax consequences until they reach legal age; however, the child gains full unrestricted access to the funds once they hit adulthood.
Roth IRAs give teens a jump start on saving for retirement, but the accounts require earned income.
ABLE accounts are an investment option for qualified people with disabilities. There is a one-time opportunity for eligible beneficiaries at age 17 to roll Trump account assets into an ABLE account; the window can pass quickly, so it’s a key milestone that needs to be flagged.
Proactive client conversations start now
Trump accounts are in the early stages of implementation, but now is the time to have proactive conversations with clients.
You can help clients determine if they’re eligible for the federal pilot contribution and the pilot’s associated requirements. Because the election can be made with their 2025 tax return, some clients may be ready to pursue this program.
There is ambiguity under the current language of H.R. 1 about whether contributions to Trump accounts should be considered for gift tax and generation-skipping transfer tax (GST). Based on how the law is written, contributions to Trump accounts are not considered a completed gift of a present interest in property, which is eligible for the annual gift tax exclusion. As it stands, any contribution to a Trump account will be considered a taxable gift of a future interest and therefore subject to gift tax and GST. AICPA is monitoring the issue and requested further guidance from the IRS and the U.S. Treasury.
Basis tracking over an 18-year period will require consistent documentation. You’ll need to closely track the flow of contributions, particularly when multiple contributors are involved. Starting Jan. 1 of the year the child turns 18, you can support the soon-to-be adult by offering a Roth conversion, checking beneficiary designations, or aligning the account with a larger estate or retirement plan.
Don’t let qualifying families miss the age-17 window to roll over their Trump account into an ABLE account. And, although the topic may be uncomfortable, you should discuss with clients how a Trump account is handled in the event of the beneficiary’s early death. Should the child die during the growth period, the account immediately stops being a Trump account and the inheritor recognizes income equal to the account’s fair market value minus basis.
Stay informed, stay ahead
Trump accounts are an invaluable tool for many American families to build strong financial futures for their children. But one size doesn’t fit every family, and you can walk your clients through their savings options to determine which accounts work for them and their goals.
With a proactive approach, you’ll be better prepared to guide your clients through the first years of implementation. Integrating the topic of Trump accounts into your planning conversations is made easier through the PFP Section resource, Trump (Sec. 530A) Accounts: Features and Planning Opportunities.
Listen to the podcast “Trump accounts are coming — and you need to be ready” to see how Trump accounts fit into broader tax, estate, and financial plans. Not only did H.R. 1 make significant changes to U.S. tax code, but the law introduced many other critical provisions — including 10 things CPAs need to know about H.R. 1 in 2026.
To dive deeper, explore the growing library of insights, technical resources, and guides available through AICPA Tax Section and PFP Section memberships.