Established under the One Big Beautiful Bill Act in 2025, Trump Accounts are newly created accounts designed to help families build long‑term savings for their children. These accounts offer unique opportunities for families to save on behalf of their children beginning at birth and on an ongoing basis. For children born between 2025-2028, they are eligible to receive a one‑time $1,000 “pilot program payment” from the Federal government, provided an account is opened and the proper election is filed.
The $1,000 “pilot program payment” is not automatic. Parents or guardians must file IRS Form 4547 or go to trumpaccounts.gov to establish the account and elect the contribution. Accounts will be opened, starting on July 4th, 2026 but, you can file Form 4547 today to have the account opened on July 4th. Once the account is opened, the Treasury deposits $1,000 directly into the child’s Trump Account. This initial deposit from the federal government, combined with ongoing contributions and market growth, can create a meaningful foundation for future goals such as education, a first home, or early career financial stability. Funds cannot be withdrawn until the child reaches age 18.
Additionally, Michael and Susan Dell have announced a $6.25 billion commitment to fund $250 in contributions for up to 25 million Trump accounts. Details remain limited but current information suggests that eligibility would apply to the first 25 million Trump accounts that are established for children age 10 and under who are not eligible for the $1,000 seed capital. Currently, children who live in a zip code with median income under $150,000 would be eligible for the $250 contribution.
After the initial “pilot program deposit”, Trump accounts allow for an annual contribution limit of $5,000/per account by family, friends and other individuals ($5,000 contribution excludes the $1,000 “pilot program deposit”. Contributions by individuals are made after‑tax and do not appear to count towards the annual gift-tax exclusion. Once funded, investments can be made within the account and limited to low‑cost U.S. equity index funds. While the growth in the account is tax-deferred, earnings are taxed at ordinary income tax rates when distributed, not lower capital gains rates. These restrictions are designed to keep the accounts simple, low‑cost, and focused on long‑term growth through market exposure.
For many families, Trump Accounts may complement existing savings strategies like 529 plans or custodial accounts. However, because contributions are after‑tax and investment options are limited, it is important to evaluate whether this structure aligns with your broader financial plan. If you’re interested in learning more about Trump Accounts or exploring whether opening one makes sense for your situation, we encourage you to reach out to your JNBA advisory team who can help you compare potential tax benefits, understand how these accounts interact with other savings vehicles, and determine whether a Trump Account is the right fit for your family’s long‑term goals. could look like in your own plan, reach out to your JNBA Advisory Team.
The information provided regarding Trump Accounts—including federal seed money eligibility, contribution limits, and tax-deferred growth—is for educational and illustrative purposes only. As Trump Accounts are a newly established vehicle under the One Big Beautiful Bill Act (OBBBA), IRS regulations and reporting requirements (including the use of Form 5498-TA and Form 4547) are subject to change. Specifically, the treatment of contributions under Federal Gift Tax rules (Form 709) and the impact on FAFSA/financial aid eligibility have not been fully codified and may vary based on individual circumstances. Past performance is no guarantee of future results. Different types of investments involve varying degrees of risk. Therefore, there can be no assurance that the future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by JNBA Financial Advisors, LLC [“JNBA”]), or any consulting services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Neither JNBA’s investment advisor registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if JNBA is engaged, or continues to be engaged, to provide investment advisory services. JNBA is neither a law firm, nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice.
Due to various factors, including changing market conditions and/or applicable laws, some of the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors.
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