02/26/2026
As an income tax accountant, I’ve been getting questions almost daily about the new trust accounts for children being called Trump Accounts. While the rules and regulations for this program have yet to be developed, here’s what I can tell you.
These will be custodial investment accounts and will be heavily regulated under rules issued by the Internal Revenue Service and the United States Department of the Treasury. Unlike custodial brokerage accounts or Roth IRAs, parents will not have discretion over investment choices. Funds will be invested in government-approved, low-cost U.S. stock index funds — not individual stocks or custom portfolios. While nothing has yet to be made final, we’re being told that this money will be taxed like other retirement funds. There will also be staunch restrictions on how the money can be spent when it is cashed out.
Children born in 2025-2028 will be eligible for a one-time $1000 seed contribution from the government. Children currently 1-10 years may be eligible for a $250 private donation from the Dell Foundation following the same guidelines. These donations will be based on zip codes and the median household income in those zip codes. It appears all SE Oklahoma will qualify.
This program is scheduled to start in July 2026. Parents making applications with their 2025 federal income tax return or who have applied online will receive instructions in the coming months.
A couple sidenotes here. Even if your child doesn’t qualify for the seed money, the ability to open an investment account for your child is nothing new. The only significant changes this program makes are the initial seed money and the government regulation of the account.
There is also some misunderstanding about the potential growth of the investment. I’ve ran a quick amortization chart to give some real figures. Assuming no other contributions are made to the account, a $1000 seed investment with a 7% average annual gain would grow to $3,380 in 18 years. For a 10-year-old, a $250 seed investment with the same average gain would grow to $430 in eight years.
For this program to grow to a significant number, parents, grandparents, employers, and others will have to contribute to this fund annually. If a newborn’s parents added the maximum $5000 to this account each year for 18 years with an average growth of 7%, it would grow to around $173,000. That said, parents who can afford that significant of an investment could easily invest in an unrestricted account with more favorable tax treatment and better yields.
The real benefit of these new trust/Trump Accounts is that they will encourage parents who couldn’t or wouldn’t otherwise make investment accounts for their children do so, hopefully contributing more themselves throughout the child’s life.
