Trump Accounts
Commonwealth Credit Union is dedicated to providing members with updates on federal financial programs, including Trump Accounts.
Keeping you informed
Commonwealth Credit Union is committed to keeping our members informed about federal financial programs that may affect your family’s long‑term savings plans. For the 2025 tax season, you can elect to open a Trump Account for eligible children by filing IRS Form 4547 with your 2025 federal tax return.
Trump Accounts are now part of federal law, created under legislation signed in July 2025. However, while the legal framework is in place, accounts are not yet open for contributions. Implementation is currently underway, with accounts expected to become available beginning July 5, 2026.
Below is a clear overview of what Trump Accounts are, how they are structured under the law, and what families should know now.
What Is A Trump Account?
A Trump Account is a new tax-advantaged investment account for children under age 18. According to the federal government, the program was designed to:
- Encourage long-term investing starting at birth
- Provide eligible children with a government “seed” contribution
- Allow families and others to contribute additional funds over time
- Invest funds in low-cost, broad-based U.S. index investments
- Restrict withdrawals until adulthood
Key Features
Eligibility
- Available for U.S. children under age 18 with a valid Social Security number.
- Children born between January 1, 2025 and December 31, 2028 are eligible for a federal seed contribution once an account is properly established.
Federal Seed Contribution
- Eligible children may receive a one‑time $1,000 federal contribution.
- A parent or guardian must properly establish the account and make the required election to receive the deposit.
Contribution Limits
- Up to $5,000 per year per child may be contributed by parents, family members, or others.
- Employers may contribute up to $2,500 per year under certain structured programs.
- Contribution limits are scheduled to adjust for inflation beginning after 2027.
Investment Requirements
- Funds must be invested in low‑cost mutual funds or ETFs that track broad U.S. stock market indexes.
- Individual stock picking and speculative investments are not permitted.
Withdrawals
- Funds generally cannot be withdrawn until the child reaches age 18.
- After age 18, distributions are taxed under rules similar to traditional retirement accounts.
Timeline
Although Trump Accounts have now been written into law:
- Accounts are expected to become available beginning July 5, 2026.
- The IRS and U.S. Treasury are finalizing administrative rules, forms, and online enrollment systems.
- Families cannot currently open or fund these accounts.
Commonwealth Credit Union will provide updates as additional guidance becomes available.
Frequently asked questions
Are Trump Accounts available right now?
No. While the program is law, accounts are not expected to be available for opening or contributions until July 2026.
Who qualifies for the $1,000 government contribution?
Children born between January 1, 2025 and December 31, 2028 who meet eligibility requirements and have an account properly established may qualify for the one‑time federal deposit.
Can relatives other than parents contribute to the account?
Yes. Contributions from parents, relatives, and other individuals are allowed, subject to the annual $5,000 limit.
Are Trump Accounts only for college expenses?
No. Unlike 529 college savings plans, Trump Accounts are not limited to education. After age 18, funds may generally be used under rules similar to traditional investment or retirement accounts. Tax treatment will depend on how distributions are structured.
How are Trump Accounts different from 529 plans?
| Trump Accounts | 529 Plans |
|---|---|
| Include possible federal seed deposit | No federal seed deposit |
| Broader potential uses after age 18 | Primarily education-focused |
| Invested in broad index funds | Invested in selected 529 portfolios |
| Contributions capped at $5,000 per year | Higher lifetime contribution limits |
Will Trump Accounts affect financial aid eligibility?
Federal guidance on financial aid treatment is still developing. Families should monitor future updates before making planning decisions.
Will Commonwealth Credit Union offer Trump Accounts?
Financial institutions may participate depending on final regulatory guidance. Commonwealth Credit Union is closely monitoring implementation details and will communicate if and when these accounts become available through our institution.
Please Note
Commonwealth Credit Union provides this information solely as an educational resource to help members understand emerging federal savings programs. We do not administer Trump Accounts, influence how they are implemented, determine eligibility, process applications, or manage any part of the federal program. All rules, timelines, and requirements are established by federal law and regulated by the U.S. Treasury and the IRS. Program details may change as federal guidance evolves. Members should consult official IRS and Treasury communications for the most current information.