IRS Issues New Trump Account Rules for Child Investments
On March 9, 2026, the IRS released new regs (REG-117270-25 and 117002-25) for tax-deferred investment programs for children under Internal Revenue Code Section 530A, known as “Trump accounts,” and the associated pilot program under which the Trump accounts for eligible children can receive $1,000 initial contributions. The proposed regs address details regarding the opening of Trump Accounts under Proposed Regulations Section 301.6434-1.
The proposed regs clarify that an eligible individual to have a Trump account opened for their benefit is anyone who hasn’t yet turned 18 and won’t turn 18 in the current calendar year. That period of eligibility is referred to as the “growth period” (see Section Prop. Regs. Section 1.530A-1(b)(4)(iv)). The proposed regs would establish an order of priority to address who has authority to open a Trump Account for an eligible individual, provided one hasn’t yet been opened by the Secretary under the pilot program (see Prop. Regs. Section 1.530A-1(c)(1)(i)(B)). The order of priority for the “authorized individual” would be the individual’s legal guardian, followed by the individual’s parent, followed by the individual’s adult sibling, followed by the grandparent of the eligible individual. If multiple people share the same priority level, anyone at that priority level may make the election. Despite the order of priority rule, the proposed regs clarify that if an individual who isn’t an authorized individual elects to open a Trump Account, that account won’t fail to qualify as a Trump Account (Prop. Regs. Section 1.530A-1(c)(1)(ii)).
The proposed regs state that the election to open a Trump account is done by filing a one-page Form 4547, which could be filed with the authorized individual’s tax return or separately (see Prop. Regs. Section 1.530A-1(c)(3)). This election must be made during the “growth period” under Prop. Reg. Section 1.530A-1(c)(2). The “responsible party” of the initial Trump Account will be the individual who makes the election to open the account, and they’ll have the ability to choose investments, direct a transfer under certain qualified rollovers (for example, to an Achieving a Better Life Experience account) and to choose a successor responsible party (see Prop. Regs. Section 1.530A-1(d)). The proposed regs require Trump Accounts to be titled and clearly designated as a Trump Account (Prop. Regs. Section 1.530A-1(b)(2)(iv)).
REG-117002-25 sets forth rules regarding “pilot program contributions” ($1,000 initial contribution from the Secretary for eligible children): A “pilot program electing individual” would be required to make an election with respect to an eligible child of the individual to receive the $1,000 pilot program contribution into the beneficiary’s Trump Account, and the contribution would be treated as a deemed overpayment of tax for the child, which is then redirected as the $1,000 contribution to the child’s Trump Account (see Prop. Regs. Section 301.6434-1). IRC Section 6434(f), as described in Prop. Regs. Section 301.6434-1(c)(4), ensures that the overpayment is contributed to the Trump account, and not, for example, credited to unpaid tax liabilities under IRC 6402 (see §301.6434-1(c)(4)). The overpayment is credited towards the child’s “special taxable year” (defined under Prop. Regs. Section 301.6434-1(b)(6)) to ensure prompt payment (rather than waiting until the end of a given tax year) of the pilot program amount (see Prop. Regs. Section 301.6434-1(c)(1)).
An “eligible child” for the pilot program contribution includes an individual who: (1) the pilot program electing individual anticipates will be their dependent under IRC Section 152. Prop. Regs. Section 301.6434-1(b)(1)(i) expressly states that mere anticipation is sufficient, and if when the electing individual’s tax return is ultimately filed the child-beneficiary isn’t the electing individual’s dependent, this won’t render the pilot program election ineffective; (2) is born in calendar year 2025, 2026, 2027 or 2028, (3) is a U.S. citizen, (4) has a Social Security number; and (5) who has no prior pilot program election made (see Prop. Regs. Section 301.6434-1(b)(1)). The election must be made within the “growth period’ (See Prop. Regs. Section 301.6434-1(d)(1)(ii)).