Trump Accounts: 6 Things to Know Before Opening One
07/29/2026
Key Takeaways:
When we published What Are Trump Accounts for Kids, and Should You Open One?, the program had just been announced and details were still coming together. Now that Trump Accounts have officially launched, we've heard enough questions from families and employers to know there are a few topics worth addressing with more clarity.
Here are six elements worth understanding before you decide whether to open an account.
This may be one of the most valuable features of a Trump Account, and it's easy to overlook.
A Trump Account is technically a traditional IRA once the child reaches the age of 18. That means the seed money, employer contributions, and any investment growth are generally taxable when withdrawn. But once the beneficiary turns 18, the account becomes eligible for a Roth conversion, just like any other traditional IRA.
Why does that matter? Many 18-to-23-year-olds are in the lowest tax brackets of their lives, as they are working part-time, starting a first job, or still in school. If the account is converted to a Roth IRA during those low-income years, the conversion could result in little to no tax owed, and the entire balance can then grow completely tax-free from that point forward.
Kiddie tax rules can complicate the timing if the beneficiary is still a dependent, so this is worth a conversation with a tax professional as the beneficiary approaches 18. But the opportunity itself is real, and it's one more reason to consider opening an account sooner rather than later.
Trump Accounts are established in one of three official ways:
A quick note on names: TrumpAccounts.com (with an "s") is a different, independent site, not affiliated with the Treasury Department. Stick to the three official destinations above.
The app tends to be the simpler path. Opening an account through the app allows you to file IRS Form 4547, the form required to elect into a Trump Account, in the same session. Opening through TrumpAccounts.gov generally requires that Form 4547 already be filed with the IRS separately before the account can be activated.
Communications about the account will come only from [email protected] or from addresses ending in @trumpaccount.com. A text, call, or unfamiliar link claiming to be from the program, including one from a site using a similar name, should not be trusted.
It's also worth clarifying who is allowed to open the account, since this isn't limited to parents. The IRS recognizes an order of priority for who may file Form 4547 on a child's behalf:
A person lower in this order may only file if no one higher in priority is available. So a grandparent, for example, generally cannot open the account if a legal guardian or parent is available to do so.
Contributions made by individuals to a Trump Account are not tax-deductible. Unlike a traditional IRA contribution, there's no deduction on your tax return for money contributed.
What the account does offer is flexibility. Contributions can come from parents, grandparents, other family members, friends, and employers, up to the applicable annual limits (currently $5,000 per year combined, with employer contributions counting toward that cap). The app also includes an "Invite Loved Ones to Contribute" feature, which allows a QR code or shareable link to be sent directly to family or friends who'd like to contribute for a birthday, holiday, or any other occasion.
The tax treatment of a withdrawal depends on where the money came from.
Once the beneficiary turns 18, their own after-tax contributions — money they or family members put in directly — can generally be withdrawn tax-free and penalty-free. That's their basis, and since it was already taxed once, it isn't taxed again.
The rest of the account — the government's seed money, any employer contributions, and investment earnings — is treated differently. That portion is generally subject to traditional IRA tax rules, meaning it's taxable to the beneficiary as ordinary income when withdrawn. However, if the funds are used for a qualifying purpose, such as education expenses, a first home purchase, starting a business, or other qualified early-adulthood expenses, the additional 10% early withdrawal penalty generally does not apply. Income tax may still be owed on that portion, but the penalty is avoided.
In short, this is tax-deferred money. Used the right way, it can avoid the early withdrawal penalty, but it isn't tax-free money for any purpose. Planning the order in which different accounts are tapped — a 529 plan first, a Trump Account second, for example — can make a meaningful difference in what a family retains.
Trump Account contributions are automatically invested in a default exchange-traded fund (ETF) that provides broad exposure to U.S. companies, allowing the investment to grow over time as those companies grow. Specifically, contributions are invested in SPYM, a low-cost index fund that tracks the S&P 500 by holding hundreds of the largest U.S. companies.
This is designed as a long-term, "set it and forget it" approach suited to a multi-decade holding period, exactly the kind of timeline these accounts are built around.
Separate from the account's investment structure is a private charitable contribution some children may qualify for. The Michael & Susan Dell Foundation has pledged $6.25 billion to fund one-time $250 deposits into eligible children's Trump Accounts. This is a private gift, not a government benefit.
To qualify, a child generally needs to meet all of the following:
In addition to the $250 contribution, additional private funding may become available in the future. The Trump Account structure allows donors to direct contributions to specific ZIP codes, which could make the accounts an attractive vehicle for future philanthropic giving.
The Roth conversion opportunity, the available contribution windows, and the compounding timeline are all factors worth weighing sooner rather than later when deciding whether a Trump Account fits your family's plans.
At Kaup's Tax & Wealth Management, our goal is to help clients understand how opportunities like this can fit into their broader wealth strategy before deciding if it's right for them. That means evaluating them alongside your financial, tax, asset, legacy, and protection strategies to see how decisions today could impact your family's financial picture years down the road.
Let's review your situation together and help make sure you're positioned to take full advantage of any benefit available to your family.
To book your consultation, call us at 402-924-3607 or connect with us here.
Frequently Asked Questions About Trump Accounts
About the authors:
Ben Kaup, CPA is the Vice President of Kaup’s Tax & Wealth Management in Stuart, Nebraska. An experienced financial and tax advisor and a licensed insurance agent, he holds degrees in accounting, finance, and professional accountancy from the University of Nebraska–Lincoln. Ben specializes in tax preparation, tax reduction strategies, and holistic financial planning.
Scott Kaup, CFP® is the founder of Kaup’s Tax & Wealth Management. With decades of experience helping business owners and high-net-worth families navigate taxes, retirement, and multigenerational financial planning, Scott specializes in building coordinated strategies that adapt over time.
- A Roth conversion at age 18 may let a child grow Trump Account funds tax-free for decades, often at lower tax rates before their peak earning years
- Accounts are established through TrumpAccounts.gov, the official Trump Accounts app, or the web app at trumpaccount.com — no other site or link should be trusted, and note that TrumpAccounts.com (with an "s") is an unofficial third-party guide, not one of these official channels
- A legal guardian, parent, adult sibling, or grandparent may open an account, in that order of priority — it is not limited to parents
- Contributions are not tax-deductible, but anyone can contribute, including through the app's "Invite Loved Ones to Contribute" feature
- Funds are invested by default in SPYM, an S&P 500 index fund
- Some children may separately qualify for a private $250 deposit from the Michael & Susan Dell Foundation
What We Wanted to Clarify Since Our Last Blog
When we published What Are Trump Accounts for Kids, and Should You Open One?, the program had just been announced and details were still coming together. Now that Trump Accounts have officially launched, we've heard enough questions from families and employers to know there are a few topics worth addressing with more clarity.
Here are six elements worth understanding before you decide whether to open an account.
1. The Roth Conversion at Age 18 Is a Significant Tax Advantage
This may be one of the most valuable features of a Trump Account, and it's easy to overlook.
A Trump Account is technically a traditional IRA once the child reaches the age of 18. That means the seed money, employer contributions, and any investment growth are generally taxable when withdrawn. But once the beneficiary turns 18, the account becomes eligible for a Roth conversion, just like any other traditional IRA.
Why does that matter? Many 18-to-23-year-olds are in the lowest tax brackets of their lives, as they are working part-time, starting a first job, or still in school. If the account is converted to a Roth IRA during those low-income years, the conversion could result in little to no tax owed, and the entire balance can then grow completely tax-free from that point forward.
Kiddie tax rules can complicate the timing if the beneficiary is still a dependent, so this is worth a conversation with a tax professional as the beneficiary approaches 18. But the opportunity itself is real, and it's one more reason to consider opening an account sooner rather than later.
2. How to Open a Trump Account and Who Is Allowed to Do It
Trump Accounts are established in one of three official ways:
- At TrumpAccounts.gov, the U.S. Treasury's official information and enrollment hub, where you can review eligibility and file your election.
- Through the web app at trumpaccount.com, confirmed by Treasury and built for account management once you're set up.
- Through the official Trump Accounts app, available on the Apple App Store and Google Play.
A quick note on names: TrumpAccounts.com (with an "s") is a different, independent site, not affiliated with the Treasury Department. Stick to the three official destinations above.
The app tends to be the simpler path. Opening an account through the app allows you to file IRS Form 4547, the form required to elect into a Trump Account, in the same session. Opening through TrumpAccounts.gov generally requires that Form 4547 already be filed with the IRS separately before the account can be activated.
Communications about the account will come only from [email protected] or from addresses ending in @trumpaccount.com. A text, call, or unfamiliar link claiming to be from the program, including one from a site using a similar name, should not be trusted.
It's also worth clarifying who is allowed to open the account, since this isn't limited to parents. The IRS recognizes an order of priority for who may file Form 4547 on a child's behalf:
- Legal guardian
- Parent (either parent, regardless of filing status)
- Adult sibling
- Grandparent
A person lower in this order may only file if no one higher in priority is available. So a grandparent, for example, generally cannot open the account if a legal guardian or parent is available to do so.
3. Contributions Aren't Tax-Deductible, But Anyone Can Contribute
Contributions made by individuals to a Trump Account are not tax-deductible. Unlike a traditional IRA contribution, there's no deduction on your tax return for money contributed.
What the account does offer is flexibility. Contributions can come from parents, grandparents, other family members, friends, and employers, up to the applicable annual limits (currently $5,000 per year combined, with employer contributions counting toward that cap). The app also includes an "Invite Loved Ones to Contribute" feature, which allows a QR code or shareable link to be sent directly to family or friends who'd like to contribute for a birthday, holiday, or any other occasion.
4. What Trump Account Funds Can Actually Be Used For
The tax treatment of a withdrawal depends on where the money came from.
Once the beneficiary turns 18, their own after-tax contributions — money they or family members put in directly — can generally be withdrawn tax-free and penalty-free. That's their basis, and since it was already taxed once, it isn't taxed again.
The rest of the account — the government's seed money, any employer contributions, and investment earnings — is treated differently. That portion is generally subject to traditional IRA tax rules, meaning it's taxable to the beneficiary as ordinary income when withdrawn. However, if the funds are used for a qualifying purpose, such as education expenses, a first home purchase, starting a business, or other qualified early-adulthood expenses, the additional 10% early withdrawal penalty generally does not apply. Income tax may still be owed on that portion, but the penalty is avoided.
In short, this is tax-deferred money. Used the right way, it can avoid the early withdrawal penalty, but it isn't tax-free money for any purpose. Planning the order in which different accounts are tapped — a 529 plan first, a Trump Account second, for example — can make a meaningful difference in what a family retains.
5. How the Account Is Invested
Trump Account contributions are automatically invested in a default exchange-traded fund (ETF) that provides broad exposure to U.S. companies, allowing the investment to grow over time as those companies grow. Specifically, contributions are invested in SPYM, a low-cost index fund that tracks the S&P 500 by holding hundreds of the largest U.S. companies.
This is designed as a long-term, "set it and forget it" approach suited to a multi-decade holding period, exactly the kind of timeline these accounts are built around.
6. The Michael & Susan Dell Foundation's $250 Contribution, and Possible Future Philanthropic Contributions
Separate from the account's investment structure is a private charitable contribution some children may qualify for. The Michael & Susan Dell Foundation has pledged $6.25 billion to fund one-time $250 deposits into eligible children's Trump Accounts. This is a private gift, not a government benefit.
To qualify, a child generally needs to meet all of the following:
- Be 10 years old or younger (generally born before January 1, 2025)
- Not already qualify for the federal $1,000 Trump Account seed deposit (reserved for children born 2025–2028)
- Live in a ZIP code with a median household income below $150,000
- Have an eligible Trump Account opened for them
- If a child was born before 2025, it's worth checking eligibility for this deposit before assuming there's no additional funding available.
In addition to the $250 contribution, additional private funding may become available in the future. The Trump Account structure allows donors to direct contributions to specific ZIP codes, which could make the accounts an attractive vehicle for future philanthropic giving.
The Bottom Line
The Roth conversion opportunity, the available contribution windows, and the compounding timeline are all factors worth weighing sooner rather than later when deciding whether a Trump Account fits your family's plans.
At Kaup's Tax & Wealth Management, our goal is to help clients understand how opportunities like this can fit into their broader wealth strategy before deciding if it's right for them. That means evaluating them alongside your financial, tax, asset, legacy, and protection strategies to see how decisions today could impact your family's financial picture years down the road.
Let's review your situation together and help make sure you're positioned to take full advantage of any benefit available to your family.
To book your consultation, call us at 402-924-3607 or connect with us here.
Frequently Asked Questions About Trump Accounts
Can a Trump Account be converted to a Roth IRA before the beneficiary turns 18?
No. The account must pass the "growth period," which ends the year the beneficiary turns 18, before a Roth conversion is possible.Are contributions to a Trump Account tax-deductible?
No. Individual contributions are made with after-tax dollars, though the account itself follows traditional IRA rules on withdrawal.Does a parent have to be the one to open the account?
No. A legal guardian, parent, adult sibling, or grandparent may open an account, in that order of priority, depending on who is available.Do you need to file IRS Form 4547 separately if you open an account through the app?
No. Opening an account through the official Trump Accounts app allows you to file Form 4547 within the same process.Is the $250 Dell Foundation deposit the same as the federal $1,000 seed deposit?
No, they are separate. The $1,000 comes from the U.S. Treasury for children born 2025–2028. The $250 is a private charitable gift from the Michael & Susan Dell Foundation for eligible children age 10 and under who don't qualify for the federal deposit.Can grandparents or friends contribute directly through the app?
Yes. The app's "Invite Loved Ones to Contribute" feature allows a QR code or link to be shared so others can contribute directly to the account.How much can be contributed to a Trump Account each year?
Up to $5,000 per year combined from all individual sources, with employer contributions counting toward that same limit. The $1,000 federal pilot deposit and the $250 Dell Foundation deposit are separate and don't count against this cap.About the authors:
Ben Kaup, CPA is the Vice President of Kaup’s Tax & Wealth Management in Stuart, Nebraska. An experienced financial and tax advisor and a licensed insurance agent, he holds degrees in accounting, finance, and professional accountancy from the University of Nebraska–Lincoln. Ben specializes in tax preparation, tax reduction strategies, and holistic financial planning.
Scott Kaup, CFP® is the founder of Kaup’s Tax & Wealth Management. With decades of experience helping business owners and high-net-worth families navigate taxes, retirement, and multigenerational financial planning, Scott specializes in building coordinated strategies that adapt over time.