What to Know About Sec. 530A Accounts
Recent legislation introduced a new type of savings and investment account for children: Sec. 530A “Trump” accounts. These accounts are intended to provide a tax-advantaged way to save for a child’s future.
Because this is a brand-new account type, many details are still emerging. Here is an overview of how these accounts are designed to work based on what is known so far.
What are Trump accounts?
Section 530A accounts, referred to as "Trump accounts," are tax-advantaged investment accounts for children under age 18. In some ways, they resemble an IRA, but they have their own eligibility, contribution, and investment rules during what the law refers to as the “growth period.”
One of the most notable features is a federal pilot contribution. For children born between 2025 and 2028, the federal government will contribute $1,000 to the account if the required election is made.
Based on current information, that election is emade using a 2025 tax form, Form 4547. This form may be used both to open an initial Trump account and to request the one-time $1,000 pilot contribution. The form can be filed with an individual’s 2025 income tax return or mailed separately to the IRS. In addition, a website, trumpaccounts.gov, is expected to be available for families to set up an account and request the pilot contribution.
It is important to note that contributions cannot be made to these accounts until July 4, 2026. Additional guidance is expected from the IRS and Treasury.
How are they different from 529 plans or custodial accounts?
Families may be familiar with other savings tools for children, such as 529 plans and custodial accounts, but these new accounts serve a different purpose.
A 529 plan is specifically designed for education savings. When funds are used for qualified education expenses, investment growth and withdrawals may be tax-free.
A custodial account, such as a Uniform Transfers to Minors Act account, allows assets to be transferred to a child, with control typically passing to the child once they reach the age of majority.
A Trump account is geared more toward long-term savings and growth. Under the law, the account generally transitions to treatment as a traditional IRA once the child reaches age 18. That makes it less focused on a near-term expense and more oriented toward long-range wealth building.
Who can contribute, and how much?
In addition to the federal pilot contribution, nonexempt contributions of up to $5,000 per year can be made to a Trump account.
The law allows for a broad range of contributors. Depending on the circumstances, contributions may be made by parents, guardians, grandparents, other relatives, employers, friends, and certain charitable organizations.
This flexibility could make Trump accounts attractive for families looking to coordinate gifts and savings for a child over time.
Looking ahead
Because Trump accounts are new, more details and implementation guidance are still expected. Even so, they represent a noteworthy addition to the range of savings options available for children and may become an important part of long-term financial planning for some families.
