If you are the parent of a child under 18 in Massachusetts, your child probably has a Trump Account, whether or not you signed up for one. The U.S. Treasury announced that it has completed automatic enrollment, and that “every eligible child under the age of eighteen with a valid Social Security number now has a Trump Account.” More than 60 million children were enrolled automatically, according to Treasury Secretary Scott Bessent.
But an account existing is not the same as money in it. Treasury says a parent or guardian “must claim the child’s automatically enrolled Trump Account,” and that eligible children “must also have their Trump Account claimed to receive the one-time $1,000 seed contribution.” Here is what these accounts are under federal law, who gets the $1,000, how to claim, and the rules on contributions and withdrawals.
What a Trump Account is
Trump Accounts were created by last year’s federal tax law and are codified at 26 U.S.C. § 530A. Legally, a Trump Account is a kind of individual retirement account:
- It is “an individual retirement account (as defined in section 408(a)) which is not designated as a Roth IRA,” opened for a child, and treated for tax purposes “in the same manner as an individual retirement account” except as the statute provides. § 530A(a), (b)(1).
- Treasury can open an account for a child on its own. The law lets the Secretary make the election to establish an account for a child “based on information available to the Secretary from tax returns or otherwise.” § 530A(b)(2)(C)(i). That is the legal basis for automatic enrollment.
- A child is eligible if they have not turned 18 by the end of the year the account is set up and have a Social Security number. § 530A(b)(2)(A), (B).
Who gets the $1,000
The $1,000 is a separate program, 26 U.S.C. § 6434, the “Trump accounts contribution pilot program.” Not every child with an account qualifies. The child must be:
- born after December 31, 2024 and before January 1, 2029;
- a United States citizen; and
- a qualifying child of the person making the election, with a Social Security number, and no prior election made for that child.
The law treats the $1,000 as a tax payment made on the child’s behalf and directs Treasury to deposit it in the child’s Trump Account. It cannot be reduced or seized to pay other debts, such as back taxes or child support offsets. § 6434(f).
Children born before 2025 can have an account and receive contributions, but they do not get the $1,000 seed money.
How to claim the account
According to Treasury:
- Download the official Trump Accounts app, available for iOS and Android.
- Verify your identity and your relationship to the child.
- Review the child’s information and accept the account terms.
Until a parent or guardian claims the account, Treasury says, family members, friends and employers cannot contribute to it. For a child born in 2025 through 2028, claiming is also what triggers the $1,000.
Because the government has created accounts for tens of millions of children, expect scams. Use only the official app, and be cautious about any text, call or email asking for a child’s Social Security number or bank information to “release” the $1,000.
Contributions: who can put money in, and how much
- Family and others. Total contributions for a child are capped at $5,000 a year before the year the child turns 18, with the cap rising with inflation after 2027. § 530A(c)(2). The $1,000 seed money and certain “qualified general contributions,” such as those from governments or charities, do not count toward that cap.
- No deduction. Contributions made before the year the child turns 18 are not tax-deductible. § 530A(c)(1).
- Employers. An employer can contribute up to $2,500 a year to the Trump Account of an employee or the employee’s dependent, and that amount is excluded from the employee’s income if made under a qualifying program. 26 U.S.C. § 128.
- Too much in. Excess contributions can be withdrawn, but the withdrawal triggers an additional tax equal to 100 percent of the earnings on the excess. § 530A(d)(5).
How the money is invested
Until the year the child turns 18, the account may hold only an “eligible investment”: a mutual fund or exchange-traded fund that tracks the S&P 500 or another broad index of primarily U.S. companies, does not use leverage, and charges annual fees of no more than 0.1 percent. Industry or sector-specific funds are not allowed. § 530A(b)(3).
When the child can take money out
- Not before 18. With narrow exceptions, “no distribution shall be allowed before the first day of the calendar year in which the account beneficiary attains age 18.” § 530A(d)(1).
- After that, IRA rules. Because the account is treated like a traditional IRA, withdrawals are generally taxed under the IRA rules. The $1,000 seed, employer contributions excluded under § 128 and qualified general contributions are not treated as after-tax money, so they are taxed when withdrawn. § 530A(d)(2).
- Disability savings. In the year the child turns 17, the account can be rolled directly into an ABLE account, the federal savings account for people with disabilities. § 530A(d)(4).
What we don’t know yet for Massachusetts
We have not found guidance from the Massachusetts Department of Revenue on how the state will treat Trump Account contributions, earnings or withdrawals for state income tax. State tax treatment does not always match federal treatment. If you plan to contribute significant amounts, watch for state guidance before tax season.
Frequently asked questions
Does my child already have a Trump Account?
Probably. Treasury says automatic enrollment is complete and every eligible child under 18 with a valid Social Security number now has an account. A parent or guardian has to claim it through the official Trump Accounts app.
Who gets the $1,000 Trump Account deposit?
U.S. citizen children born from January 1, 2025 through December 31, 2028, with a Social Security number. Treasury says the account must be claimed to receive the one-time $1,000. 26 U.S.C. 6434.
How much can I put in a Trump Account?
Up to $5,000 a year in total from family and others, indexed for inflation after 2027. Employers can add up to $2,500 a year tax-free to the employee. The $1,000 seed does not count toward the cap.
When can the money be withdrawn?
Generally not until the calendar year the child turns 18. After that, the account follows traditional IRA rules.
Is a Trump Account a Roth IRA?
No. The statute defines it as an individual retirement account that is not designated as a Roth IRA.
Sources: U.S. Department of the Treasury announcement on completion of automatic enrollment, quoting Secretary Scott Bessent. 26 U.S.C. 530A, 6434 and 128 read at the Legal Information Institute. General information about federal tax law, not tax or legal advice.