What is it?
 A special traditional IRA for a child under 18. Think: “kid IRA that later becomes their adult IRA.”

 

Who is it for?
 Children under 18 with a Social Security number and a Trump account election (Form 4547) on file.

 

Annual contribution limit (during childhood):
 Up to $5,000 per child per year from family + employer combined (plus certain government contributions on top).

 

Special bonus:
 Children born from 2025–2028 can receive a $1,000 government contribution if a Trump account is opened for them.  You literally get free money, no strings attached.

 

Business angle:
Employers can deduct up to $2,500 per employee per year in Trump account contributions, excluded from the employee’s taxable income. 
For owner-employees, this can include contributions to their children’s Trump accounts.

• It is a tax-favored retirement account for a child under 18.
• During childhood, this “kid phase” is called the growth period.
• After the growth period, it operates like a traditional IRA for the now-adult child.
• No earned income required: You do not need your child to have wages to fund a Trump account.
• Investment rules during growth period:
  • Money must be invested in very low-cost index mutual funds or ETFs that primarily hold U.S. stocks.
  • No leverage, no individual stocks, no real estate syndications, no crypto, etc.  In other words, we can't self direct (yet) :( 
• Distributions:
  • During the growth period, distributions are essentially locked out.
  • After that, the account is treated like a traditional IRA (with early withdrawal penalties unless an exception applies).

Opening a Trump account requires an election for the child. That election is made on Form 4547 (Trump Account Election).  CURRENT GUIDANCE SHOWS THIS WILL NOT BE WITH YOUR TAX RETURN SO PLEASE BE AWARE!  ANOMALY WILL SEND ADDITIONAL GUIDANCE ON ANY SUPPORT WE CAN OFFER HERE.

1. In practice, most  will complete Form 4547 through the custodian’s account-opening process (either online or paper), with the custodian filing or transmitting the election as required.
   
   
2. Fund the account
   • Once the Trump account is established and coded correctly, you can:
     • Elect or confirm the $1,000 pilot contribution (if the child is eligible).
     • Make allowable contributions (family and/or employer).
     • Select the appropriate low-cost index fund(s) or ETF(s) offered on the platform.

A. Government contributions

There are two big government-side pieces you should know:

1. $1,000 pilot program contribution
   • Available for children born between 2025 and 2028, subject to specific eligibility rules.
   • Non-taxable when contributed.
   • Does not count against the $5,000 annual private contribution limit.
2. Other government or charitable contributions
   • Certain contributions from governments or qualifying charities can be made for groups of children.
   • These also sit outside your personal $5,000 limit.

B. Family and employer contributions (the ones you actually control annually)

During the growth period (childhood years):

• Annual private limit per child:
•  Up to $5,000 per year, from:
  • Parents
  • Grandparents
  • Other family or friends
  • Employer Trump contributions (see below for our tax strategies)
• Employer Trump contributions (Section 128):
  • Employers can contribute up to $2,500 per employee per year.
  • These can go to:
    • The employee’s own Trump account (if eligible), or
    • The Trump accounts of the employee’s dependents (children).
  • These contributions:
    • Are deductible to the business, and
    • Are excluded from the employee’s taxable income.
• Gift tax treatment:
  • Personal contributions you make count as gifts to the child and generally use part of your annual gift tax exclusion for that child.

Let's dive into the strategic elements here: 

For a typical family (not focused on business planning):

1. Open a Trump account for each eligible child using Form 4547.
2. If the child qualifies, elect the $1,000 pilot contribution.  We see NO reason not to take this free money. 
3. Parents and/or grandparents:
   • Contribute up to $5,000 per year per child
4. Invest everything in a low-fee total U.S. stock index fund.
5. Leave it alone!  This is not a play around account...let it grow. 

Basic growth example

• Child is 5 years old when contributions begin.
• Family contributes $5,000 per year from age 5 through 17 (13 years).
• Total contributed: $65,000.
• Assume a modest 5% annual return, tax-deferred.

Result (approximate):

• At age 18: about $90,000–$95,000 in the Trump account.
• If left untouched until age 30 at the same rate: about $175,000.

 

Some will say - why not just use an IRA? Well for NON business owners, your child legally cannot contribute to an IRA...they have no earned income.  That is why this presents a new, massive opportunity. 

This is where Trump accounts become especially powerful.  We've been diving into this headfirst to help craft new tax strategies for our business owner clients. 

A. Employer-funded benefit for staff

As an employer, you can adopt a Trump account contribution program and:

• Deduct up to $2,500 per employee per year in Trump contributions.  
• Direct those contributions to:
  • The employee’s Trump account (if under 18), or
  • The Trump accounts of the employee’s dependents (their children).

Because these contributions are excluded from taxable wages, you are effectively:

• Providing a tax-efficient benefit to employees, and
• Helping them fund generational retirement savings for their kids.

B. Owner-operators with minor children on payroll (See Hire Kids KBs)

If you own a business and employ your minor children, Trump accounts can stack with the classic “pay your kids and fund a Roth IRA” strategy.
The usual framework:

1. Employ your children properly
   • They must do real work at reasonable pay.  Please please ask us for help here!
   • If you’re a sole proprietorship or a partnership of both parents, wages to your minor children often avoid FICA and FUTA.
2. Fund Roth IRAs for the kids
   • Up to the lesser of:
     • Their earned income, or
     • The annual Roth IRA contribution limit ($7k+)
3. Add Trump account contributions on top of this to SUPERCHARGE
   • The business:
     • Contributes up to $2,500 per child per year to each child’s Trump account.
   • Parents:
     • Can top up contributions personally so that total per child (employer + family) is no more than $5,000 per year.

Result: more money moves into tax-advantaged accounts for your children, with a good portion deductible at your high marginal rate, and very little (or no) tax cost for the children.

Do my kids need earned income for a Trump account?
 No. Unlike a Roth IRA, the child does not need earned income to receive Trump contributions during the growth period.
Do Trump account contributions reduce what I can put into my own IRA or 401(k)?
 No. Trump account limits are separate; they do not reduce your personal IRA or 401(k) contribution limits.
Are employer Trump contributions taxable wages?
 No, if done under a compliant Trump account contribution program. Up to $2,500 per employee per year can be excluded from the employee’s taxable income.

What happens at age 18?
 The special Trump rules end. The account continues as a traditional IRA for the child, subject to the usual contribution, distribution, and early-withdrawal rules.

When can we actually start funding?
 Trump accounts can be established now via Form 4547, but contributions begin after the statutory start date (mid-2026). We will help you time this correctly as the effective dates and custodian procedures go live.

 

Example:  

Business Owner using Roth + Trump for two kids

Situation

• Alex owns a profitable sole proprietorship in marketing
• Two children, ages 10 and 13, help in the business (social media)
• Alex is in a high tax bracket and wants to build wealth for the kids while cutting current taxes.
  
  

Annual strategy

1. Wages to kids
   • Pay each child $14,000 for legitimate work.
   • As a sole proprietor, Alex avoids FICA and FUTA on these wages.
   • Business deduction: $28,000.
2. Child Roth IRAs
   • Each child contributes $7,000 of their wages to a Roth IRA.
   • Long-term tax-free growth.
3. Trump account contributions
   • The business contributes $2,500 per child to Trump accounts under a Trump contribution program.
   • Parents personally contribute another $2,500 per child.
   • That’s $5,000 per child per year within the Trump limit.
   • Additional business deduction from Trump contributions: $5,000.

Total annual benefit

• Business deductions: $33,000 ($28,000 wages + $5,000 Trump contributions).
• Tax-favored savings per child per year:
  • $7,000 Roth IRA contribution
  • $5,000 Trump contribution
  •  = $12,000 per child into long-term, tax-advantaged accounts.

Over 8 years, that’s $96,000 per child contributed before any investment growth.

 

What's next?  More guidance will be out in early 2026.  If you are a business owner and wants to adopt this plan...we got you!  Our tax team has drafted an Employer Plan document that you can adopt and customize.  Please note - normal discrimination rules apply here so you can't favor certain employees. 

 

Need help! Contact your PM!