If you have a child who was born in 2016 and on, there is money sitting on the table with their name on it. All you have to do is claim it.
A
new type of investment account called a Trump Account (officially a Section
530A account) was created by the One Big Beautiful Bill Act (OBBBA), signed
into law on July 4, 2025. These are tax-advantaged accounts designed to give
American children a headstart on long-term financial security. The initial
federal money as well as subsequent contributions are invested in low-cost U.S.
equity index funds and locked in until your child turns 18.
Here’s
the short version: the federal government is giving away $1,000 per child for
babies born between 2025 and 2028, and tech billionaire Michael Dell is putting
up $250 per child for kids born 2016 through 2024. This is real, free money.
And some of it is first-come, first-served.
The $1,000 Federal Contribution: Is Your Child Eligible?
Under
a pilot program established by the OBBBA (IRC 6434), the U.S. Treasury will
make a one-time $1,000 contribution to the Trump Account of every eligible
child who meets all of the following:
? Born between
January 1, 2025 and December 31, 2028
? A U.S. citizen
? Has a valid
Social Security number
That’s
it. If your newborn or toddler meets these criteria, the federal government
will deposit $1,000 directly into their account. (This includes babies born to
U.S. citizen parents living in Israel.) The White House has reported that close
to six million children have already been signed up and 1 million have claimed
the $1,000 pilot contribution as of May 2026. The race is on!
The $250 from the Michael & Susan Dell Foundation: Is
Your Child Eligible?
In
December 2025, Michael and Susan Dell announced a landmark $6.25 billion
commitment to extend the Trump Account program to children who missed the
federal cutoff. Their foundation is seeding accounts with $250 each for the
first 25 million eligible children. To be eligible, your child must be:
? Born in the
years 2016 through 2024
? Living in a
ZIP code with a median family income below $150,000
The
good news is that all the zip codes in Baltimore qualify. But the Dell
contribution is also first-come, first-served.
Bottom Line
If
your child is 10 or under and you haven’t filed yet, the clock is ticking. This
is free money. Period. Let’s be direct: You do not have to contribute a single
additional dollar to this account. Ever. The $1,000 (or $250) goes into a Trump
Account in your child’s name, gets invested in a broad U.S. equity index fund,
and sits there, growing, until they turn 18.
No
strings. No obligation. No catch.
While
annual contributions by parents and other can be made to Trump Accounts, you
may want to consider your options when saving for your child. There are many
other tax-advantaged accounts, such as UTMAs, 529 Accounts, and
custodial IRAs each with its own set of pros and cons.
According
to Invest America (investamerica.org) and the official program site
(trumpaccounts.gov), opening a Trump Account creates no requirement to make
further contributions. You’re simply reserving your child’s spot and claiming
the money that’s already been set aside for them.
To
put the long-term power of that in perspective, $1,000 invested in a broad U.S.
stock index at birth, and left untouched for 18 years at a historical average
return, could grow to roughly $3,800 or more by the time your child turns 18.
That’s before you ever add a dollar of your own.
A Note on Taxes
Trump
Accounts offer tax-deferred growth, meaning the investments inside the
account compound without being taxed each year. However, this is not a tax-free
account like a Roth IRA. Here is a quick breakdown (per IRS Notice 2025-68):
? Government and
employer contributions (including the $1,000 pilot and the Dell $250) and their
investment growth are taxable as ordinary income when eventually withdrawn,
just like a traditional IRA.
? After-tax
individual contributions (money you personally contribute) come out tax-free on
distribution, since you already paid tax on that money.
? Withdrawals by
the child between age 18 and 59-and-a-half are generally subject to a 10% early
withdrawal penalty, with exceptions for higher education, a first home
purchase, and other qualifying events.
The
account remains locked until your child turns 18, at which point it behaves
similar to a standard traditional IRA. The bottom line: The free money grows
tax-deferred for 18+ years. Given the decades of compounding ahead, this is
still a significant gift.
How to Open an Account
The
official mechanism to elect a Trump Account is IRS Form 4547, “Trump Account
Election(s).” This one-page form serves two purposes: 1) electing to establish
the account, and 2) electing to receive the $1,000 pilot contribution, if
eligible. You must check both boxes; opening the account alone does not trigger
the $1,000 deposit. There are several ways to file:
Best
option: The official online portal is the
fastest and most direct path. File your Form 4547 election electronically at
trumpaccounts.gov without waiting for tax season.
Second
best option: If you have an IRS.gov account, you
can submit the electronic Form 4547 directly through your online account. It is
secure, immediate, and creates a confirmed record.
With
your tax return:
Include Form 4547
as part of your e-filed federal tax return.
Paper
Form 4547:
You can mail in
the paper version separately. While valid, this is the slowest method and is
not recommended given current IRS processing times.
One
Form 4547 covers elections for up to two children. After filing, watch for
activation instructions from the Treasury, expected to begin in June or July
2026. The $1,000 deposit will flow into the account no earlier than July 4,
2026, once activated and eligibility is confirmed.
Act Now! First Come, First Served
The
$1,000 federal contribution applies to every eligible child born 2025 and 2028,
so those funds are guaranteed once you file. But the Dell $250 is a capped pool
of 25 million accounts. Once that pool is claimed, it’s gone. The IRS has
already processed millions of elections. The sooner you file Form 4547, the
better your position in line for the Dell contribution and the sooner your
account activation will be processed.
There
is no cost, no obligation, and no downside to filing. Even if you never
contribute another dollar, the seed money your child receives today will have
18 years to grow in the U.S. stock market before they can touch it.
For
more information, visit the official resources:
? Official program
site: trumpaccounts.gov
? Invest America
(nonprofit supporting the program): investamerica.org
? IRS Guidance:
irs.gov (IRS Notice 2025-68; Proposed Regulations REG-117002-25)
Have
questions about Trump Accounts or how they fit into your family’s broader
financial picture? Consult a tax or financial professional who can help you
evaluate your specific situation.
Yehuda
Tenenbaum, EA is an Enrolled Agent (EA) based in the Baltimore area, federally
licensed to represent taxpayers before the IRS. He runs a full-service tax
practice, Y10 Tax Solutions, serving individuals, small businesses, and
self-employed professionals, with a focus on practical tax strategy, IRS
representation, and making the tax code work for everyday people. He is an
active member of the National Association of Enrolled Agents (NAEA) as well as
a board member of the Maryland Society of Accounting and Tax Professionals
(MSATP). To stay informed on tax news that matters to you, sign up for Yehuda’s
bi-weekly newsletter at y10tax.com/newsletter.
