IRS Releases Rules for Trump Accounts Baby Investment Program
The initiative, aimed at building wealth for young Americans, targets U.S. citizens born between January 1, 2025, and December 31, 2028. Each eligible child receives a one-time $1,000 deposit into a deferred, low-cost index fund managed through a trust account.
WASHINGTON – The Internal Revenue Service issued comprehensive rules and regulations Friday for the Trump Accounts program, a key provision of the One Big Beautiful Bill Act signed into law in December 2025, providing a $1,000 federal seed deposit into investment accounts for newborns to foster long-term financial security.
The initiative, aimed at building wealth for young Americans, targets U.S. citizens born between January 1, 2025, and December 31, 2028. Each eligible child receives a one-time $1,000 deposit into a deferred, low-cost index fund managed through a trust account. Families can open these accounts via Form 4547, available during tax filing or through the dedicated online portal at https://form.trumpaccounts.gov/. Instructions and FAQs are detailed in IRS Publication 4547, accessible at https://www.irs.gov/pub/irs-pdf/i4547.pdf.
Eligibility requires the child to be a U.S. citizen with a valid Social Security number issued within the program window. Parents, legal guardians, or designated family members can claim the deposit, with priority given first to the legal guardian, then a parent, adult sibling, or grandparent. Claims must be filed by December 31 of the year the child turns 17 to avoid forfeiture. The program prohibits retroactive claims for births before 2025.
Once established, Trump Accounts allow annual contributions up to $5,000 from parents, relatives, employers, or others, with funds growing tax-deferred. Investments are restricted to approved low-fee index funds tracking broad market indices like the S&P 500, ensuring accessibility and minimizing risk. At age 18, beneficiaries can withdraw funds for education, home purchases, starting a business, or other qualified expenses, or roll them into an IRA-style retirement account for continued growth. Early withdrawals before 18 are not permitted, except in cases of severe hardship verified by the IRS.
The IRS estimates the $1,000 seed could grow to $10,000-$15,000 by age 18 at historical market returns of 7-8% annually, providing a foundation for economic mobility. Treasury Secretary Scott Bessent highlighted the program's role in "empowering the next generation," projecting it could inject $4-5 billion annually into family savings during the four-year window.
As of February 2026, approximately two million forms have been filed for three million eligible children, indicating robust early adoption. The IRS has partnered with major financial institutions like Vanguard and Fidelity to administer accounts at no setup cost, with annual fees capped at 0.05%. Outreach includes multilingual resources and community workshops to assist low-income families.
Critics argue the program favors higher-income households with contribution capacity, but supporters note its universal access and potential to reduce wealth gaps. The initiative launches formally in July 2026, with initial deposits processed retroactively for 2025 births. Families are encouraged to consult IRS.gov for updates and eligibility checks.