Trump Accounts: IRS Notice & Form 4547 Guide

Trump Accounts are a new tax-advantaged savings account for children, created by the One Big Beautiful Bill Act and codified at Internal Revenue Code Section 530A. Contributions opened on July 4, 2026. Each account is a special type of traditional IRA held in the child’s name, with a parent or guardian acting as custodian until the child turns 18.

This guide explains who qualifies for the two seed contributions, how to open an account, how contributions are taxed, and how a Trump Account compares with a 529 plan. IRS guidance is still being finalized, so we note where a detail may change.

Who Qualifies for Trump Accounts: the $1,000 Federal Seed or the Dell Foundation $250?

Any U.S. citizen child under age 18 with a Social Security number can have an account opened on their behalf. Two separate programs offer a one-time seed deposit at no cost to the family, and they are mutually exclusive. Eligibility depends on the child’s birth year, so a household qualifies for at most one seed per child.

What this means for you: check the child’s birth year first. A child born in 2026 can claim the federal $1,000, a child born in 2023 may qualify for the Dell $250, and a child who fits neither window can still open an account and receive ordinary contributions.

How Do You Open a Trump Account?

You open a Trump Account online at trumpaccounts.gov or by filing IRS Form 4547, then designate it as a Trump Account and choose a participating custodian. The federal $1,000 seed is a separate election, so opening the account alone does not deliver it.

1. Confirm eligibility by checking the child’s Social Security number, birth year, and family ZIP code against the table above.
2. Verify your identity through ID.me, which is required to use the federal portal.
3. Open the account and select a custodian. Initial custodians include BNY and Robinhood.
4. Elect the $1,000 federal seed on Form 4547 if the child is eligible. You can file online, attach it to a not-yet-filed 2025 return, or in some cases file through a participating bank or brokerage.
5. Activate the account through the official Trump Accounts app, which adds a second identity check. Activation is required before any contribution can post.
6. Set up contributions if you want to, subject to the combined $5,000 annual cap, and ask your employer about contributions of up to $2,500 per year.

What this means for you: the free $1,000 is worth the extra step. Electing it on Form 4547 is what actually funds the seed, and it is easy to miss if you assume opening the account is enough.

How Are Trump Account Contributions Taxed?

Earnings grow tax-deferred during the growth period, and later withdrawals are taxed as ordinary income under traditional IRA rules. Personal contributions from family and friends are not deductible. No distributions are allowed from account opening through December 31 of the year the child turns 17, apart from limited exceptions such as qualified rollovers.

Gift tax used to be the open question, and it now has an answer. On June 29, 2026, the IRS issued Rev. Proc. 2026-25, a safe harbor under Section 530A. Under this guidance, if a donor’s only taxable gifts for the year are cash contributions to Trump Accounts made before the child turns 18, and total gifts to that child stay within the $19,000 annual exclusion for 2026, no Form 709 is required. You can read the full text in the IRS Rev. Proc. 2026-25 guidance.

“Qualifying Trump Account contributions are treated as gifts of a present interest, rather than a future interest, for gift tax purposes.” — IRS, Rev. Proc. 2026-25

What this means for you: most families contributing modest amounts will not need a gift tax return. If your total gifts to one child exceed $19,000 in 2026, whether through a large Trump Account contribution or other gifts, Form 709 still applies. Contact our office if you are contributing larger amounts or gifting from several sources.

Trump Account vs. 529 Plan: Which Is Better?

For most families saving for education, a 529 plan is the more flexible choice, while a Trump Account is best used to capture the free seed. The two accounts serve different goals and are not mutually exclusive.

What this means for you: many Colorado families claim the free seed in a Trump Account while directing most ongoing savings to a 529 plan for the education flexibility and the state deduction. For related planning, see our overview of the state income tax deduction under the One Big Beautiful Bill, and our outsourced accounting and CFO services for ongoing planning support.

Frequently Asked Questions

Can a child receive both the $1,000 and the $250?

No. The two programs use mutually exclusive birth-year windows, so a given child qualifies for at most one seed. A child born 2025 to 2028 may receive the federal $1,000, and a child born before January 1, 2025 who is age 10 or younger may receive the Dell $250.

Can parents or grandparents contribute to a Trump Account?

Yes. Anyone may contribute to a child’s Trump Account, subject to the combined $5,000 annual cap across all contributors for 2026. Employers may add up to $2,500 per year within that same cap, and that employer amount is not taxable income to the child.

Do Trump Account contributions require a gift tax return?

Often no. Under the Rev. Proc. 2026-25 safe harbor, if your only taxable gifts to a child are Trump Account contributions made before age 18 and your total gifts to that child stay within the $19,000 annual exclusion for 2026, no Form 709 is required. Larger or combined gifts may still require a return.

At WhippleWood CPAs, we help Colorado families weigh this account against a 529 plan and confirm how the gift tax safe harbor applies to their circumstances. Because the underlying regulations remain in draft while Treasury finalizes them, a position that looks settled today could shift, and we will tell you which details are still moving. Review your approach each year, and contact our office to discuss what makes sense for your family.