Trump Accounts and New Form 4547

Sharon Kreider, CPA

The One Big Beautiful Bill Act (OBBBA) introduces a new retirement savings vehicle that tax practitioners should add to their 2025 filing season checklist – the Trump account. Here’s what you need to advise clients about this new savings opportunity.

What Are Trump Accounts? (IR-2025-117)

Trump accounts are a new type of individual retirement account established for the exclusive benefit of eligible children. Parents, legal guardians, and other authorized individuals can open these accounts on behalf of qualifying children and potentially secure a $1,000 pilot program contribution from the government.

Eligibility Requirements for Trump Accounts

Trump accounts are available for any child who meets the following criteria:

Age requirement: Child has not turned age 18 before the end of the calendar year in which the account is established
Social Security number: Child must have a valid Social Security number

Important: Children born before January 1, 2025, who are under age 18 are fully eligible for Trump accounts with all features except the $1,000 government pilot program contribution.

The $1,000 Pilot Program Contribution

Separate from general Trump account eligibility, the federal government will make a one-time $1,000 contribution for children meeting these additional criteria:

Birth date window: Born between January 1, 2025, and December 31, 2028
U.S. citizenship: Child must be a U.S. citizen
Valid Social Security number: Required for government contribution

This election for the pilot program contribution is made separately on Form 4547. This election is separate from establishing the account itself, though both can be made simultaneously on Form 4547.

Filing Mechanics for Tax Season

Form 4547 is the vehicle for making both elections:

Establishing the Trump account
Claiming the $1,000 pilot program contribution

Timing: The form can be filed concurrently with the authorized individual’s 2025 income tax return, making this a natural conversation point during your upcoming filing season appointments.

Action Items for Practitioners

Review Form 4547 and instructions before tax season to familiarize yourself with requirements and details of the accounts
Identify eligible clients during intake—parents who had children in 2025 or plan to have children through 2028
Discuss the election as part of comprehensive tax planning conversations

Integration with Other Savings Vehicles

Trump accounts complement existing education and retirement savings strategies:

529 Plans: Unlike 529 plans limited to education expenses, Trump accounts have no restrictions on use after age 18. However, 529 plans offer tax-free growth and distributions for qualified education expenses, while Trump account distributions are taxable.
UGMA/UTMA Accounts: Trump accounts avoid the “kiddie tax” complications affecting custodial account investment income. However, custodial accounts offer more investment flexibility and the child gains control at state-mandated age (18-21), whereas Trump accounts restrict withdrawals until 18 but impose no usage limitations thereafter.
Roth IRAs for Minors: Trump account contributions do not reduce IRA contribution limits, allowing families to fund both. Roth IRAs require earned income and offer tax-free growth and distributions, while Trump accounts have no earned income requirement but provide only tax-deferred growth.

Planning Considerations

Practitioners should discuss Trump accounts alongside other savings vehicles based on family circumstances:

Universal availability makes Trump accounts relevant for all client families with children under 18, not just those with newborns in the 2025-2028 window
For education savings, 529 plans may be preferable despite Trump accounts’ flexibility. Earning on a 529 plan are tax free when used for education expenses. Trump Account earnings, the pilot contribution, and employer contributions are ordinary income and maybe subject to early withdrawal penalty
Employer matching creates a unique family benefit opportunity not available with other children’s savings vehicles
The $1,000 government contribution for children born 2025-2028 provides a start to long-term savings

For more on Trump Accounts and Form 4547, be sure to check out: