How To Open A Trump Account When You File Your Taxes
Trump’s accounts have been announced for a number of games, but the first experience most Americans will have with these investment accounts is likely to be very prosaic: when they file their taxes.
These accounts, which allow investment gains to grow in a tax-deferred manner, share some similarities with other tax-advantaged investment vehicles. They’re meant to give kids exposure to the markets at an early age so they can take advantage of compounding growth and start building wealth well before they’re eligible to contribute to traditional retirement accounts. Down the road, money collected in Trump Accounts could be used for higher education or to supplement retirement savings.
What you need to know about registration
The biggest benefit offered by Trump Accounts is for new parents: Children born between Jan. 1, 2025, and Dec. 31, 2028, they are eligible for a $1,000 grant from the federal government with no strings attached.
For these parents, the question of whether or not they opened a Trump account should be a no-brainer, he said Sarah Adkisson, director of taxation in the Eisner Advisory Group’s national tax office. “You really want to make this election. Free money. How many times has the government given you $1,000?”
Your child needs to have a Social Security number to qualify for the account, and you’ll need to have that number when you file your taxes. The agency says it can take up to ten weeks to get your child’s Social Security number if you applied while filing the birth certificate at the hospital.
Compared to the work of other jobs faced by new parents, this one is quick and straightforward. “It should be easy,” Adkisson said. Major tax software programs have added a new Form 4547, which you need to file with your return to open a Trump Account.
If you don’t file or have already filed your 2025 taxes, there is a website where you can sign up for your child’s Trump account. However, in general, experts advise filing an annual tax return even if it is not required by law. If you don’t, you could miss out on refundable tax credits and leave money on the table.
Plus, it’s a good habit to build: Helping your child file taxes when they reach their teens establishes a paper trail so they can start contributing to a Roth IRA as soon as they get their first after-school or summer job.
Do parents of older children have to apply?
For parents of children born before 2025 who don’t qualify for the $1,000 seed money donation, Adkisson says they should carefully consider which option makes the most sense for their circumstances and think about Trump accounts in the context of their broader retirement- and tax-planning picture.
Trump accounts share similar features with several other types of tax-advantaged investment accounts such as traditional IRAs, brokerage accounts and 529 plan accounts. Each has its advantages and disadvantages; there are restrictions on how and when the money invested in them can be used, and financial penalties for not following those rules.
“The big question they should ask themselves is whether, Are they using all the other tax-advantaged options available to them?” Adkisson advises. For example, if you live in a state that allows you to take a tax deduction for contributions to a 529 plan, that may be a better option than a Trump Account if you have money to contribute to one or the other.
In contrast, some employers have announced that they will contribute to Trump Accounts for employees’ children. If your employer will be contributing on behalf of employees, a Trump account may make sense, especially since you can contribute an additional $2,500 in pre-tax dollars each year.
There is a potential wrinkle for grandparents or other relatives who may be considering contributing to a child’s Trump account that has yet to be settled. Adkisson notes that the government has not yet clarified how gifted contributions to these accounts will be classified for tax purposes when calculating the donor’s living gift tax exemption.
Finally, Adkisson says the most common question he’s been getting about Trump’s accounts is about when money can be deposited into them. Answer: Not yet. Donations to the Trump accounts will start being accepted after July 4, but Adkisson says it’s not a bad idea for parents to set up accounts now, so they’ll be ready to accept donations in July.
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