The IRS has released Notice 2025‑68, the first official guidance on a new type of tax‑favored savings account for children known as Trump Accounts. These accounts were created under the One Big Beautiful Bill Act (OBBBA) and will become available beginning in 2026.
If you’re a parent, grandparent, employer, or anyone thinking about long‑term planning for a child, this is one of the most significant new savings tools in years. Below is a clear, accessible summary of how these accounts work and why they’re generating so much attention.
IRS Notice 2025‑68 (full text):
https://www.irs.gov/pub/irs-drop/n-25-68.pdf
What Exactly Is a Trump Account?
A Trump Account is a tax‑deferred IRA designed specifically for children under age 18. It functions as a long‑term savings vehicle that grows until the child becomes an adult.
Notice 2025‑68 provides an early roadmap covering:
- How accounts are created
- Who can contribute
- How rollovers work
- The $1,000 federal pilot contribution
- Investment rules
- Distribution restrictions
- Reporting requirements
More detailed regulations will follow, but this Notice gives families a solid starting point.
When Do These Accounts Start?
Contributions begin July 4, 2026, exactly one year after OBBBA was enacted.
Who Can Contribute?
One of the most flexible features of Trump Accounts is that anyone can contribute:
- Parents
- Grandparents
- Relatives
- Employers
- Philanthropic organizations
- The child (if they have earned income)
The IRS explicitly allows contributions from “any source,” which opens the door to creative planning opportunities.
How Much Can Be Contributed?
Annual contribution limits:
- $5,000 per year (indexed for inflation after 2027)
- Employers may contribute up to $2,500 of that amount without it being treated as income to the parent or child
This employer‑contribution feature may become a powerful benefit option for companies looking to support working families.
The $1,000 Federal Pilot Program
Children born between 2025 and 2028 may qualify for a one‑time $1,000 federal contribution. This is designed to give newborns a meaningful head start.
A Historic Private Contribution: $6.25 Billion from Michael and Susan Dell
In addition to the federal program, a major philanthropic commitment is dramatically expanding the reach of Trump Accounts.
Michael and Susan Dell have pledged $6.25 billion to fund $250 deposits into approximately 25 million Trump Accounts.
This contribution is aimed at children who are too old to qualify for the federal $1,000 newborn contribution, with priority given to families in lower‑income ZIP codes. It is one of the largest private charitable commitments in U.S. history and significantly broadens the number of children who will benefit from these accounts.
Additional Details From IRS Notice 2025‑68
Notice 2025‑68 also provides several important operational details that help families understand how these accounts will work in practice:
- Account ownership: A Trump Account must be opened in the child’s name, with a parent or guardian acting as the responsible individual until age 18.
- Rollover rules: Rollovers are allowed only between Trump Accounts. Transfers from traditional IRAs, Roth IRAs, 529 plans, or ESAs are not permitted.
- Contribution ordering: The federal $1,000 pilot contribution does not reduce the annual $5,000 limit. Employer and philanthropic contributions do count toward the limit.
- Early distribution exceptions: While distributions are generally prohibited before age 18, limited exceptions apply, such as correcting excess contributions or complying with legal requirements.
- Reporting requirements: Financial institutions will handle new reporting obligations similar to existing IRA forms, including reporting contributions, rollovers, and the automatic conversion at age 18.
- Prohibited transactions: Trump Accounts are subject to standard IRA prohibited‑transaction rules, including no borrowing, no pledging as collateral, and no self‑dealing.
- Automatic conversion: At age 18, the account automatically converts into a traditional IRA, and the child becomes the full owner. Standard IRA rules apply from that point forward.
These details help clarify how Trump Accounts will operate and what families can expect as financial institutions begin offering them.
How Do the Accounts Grow?
During the child’s minority — the “growth period”:
- Earnings grow tax‑free
- Distributions are generally prohibited
- Limited rollovers are allowed
- Special exceptions apply for certain circumstances
When the child turns 18, the account automatically converts into a traditional IRA, and standard IRA rules apply.
What Can These Accounts Be Invested In?
Trump Accounts follow investment rules similar to traditional IRAs, allowing:
- Stocks
- Bonds
- Mutual funds
- Other standard IRA‑eligible investments
More detailed investment guidance will be released in future regulations.
Why This Matters for Families and Employers
For Families
Trump Accounts may become a powerful tool for:
- Early retirement savings for children
- Long‑term gifting strategies
- Leveraging federal and philanthropic contributions
- Building generational wealth with decades of compounding
For Employers
Employers may consider:
- Adding Trump Account contributions to their benefits package
- Offering matching programs for employees with children
- Using the $2,500 employer‑contribution allowance as a recruitment and retention tool
For High‑Income Clients
These accounts create a new planning opportunity that blends:
- Tax‑advantaged growth
- Intergenerational wealth transfer
- Long‑term compounding
- Flexible contribution sources
Final Thoughts
IRS Notice 2025‑68 is the first major step in implementing Trump Accounts, and it gives families and employers a clear preview of what’s coming in 2026. As Treasury develops full regulations, we will continue to monitor updates and help you evaluate whether a Trump Account makes sense for your family or your business.
If you’d like a personalized analysis of how these rules apply to your situation, our team is here to help.