Trump Accounts offer tax-advantaged savings for children

Trump Accounts, also known as 530A accounts, are tax-deferred investment vehicles designed to help children under age 18 build long-term wealth. Established under federal law passed in 2025, these accounts are legally owned by the child, with parents or guardians managing them until adulthood.

Key features include a $5,000 annual contribution limit across all sources, such as family deposits and employer contributions. Children born between January 1, 2025, and December 31, 2028, may be eligible for a one-time $1,000 federal seed contribution. To ensure long-term growth, investments are restricted to specific low-cost index-tracking mutual funds or ETFs, and withdrawals are generally prohibited during the growth period.

Employers can support these accounts by contributing up to $2,500 per employee annually—which is not treated as taxable income for the worker but is subject to payroll taxes—or by establishing pre-tax payroll deduction programs. However, self-employed individuals, including sole proprietors and significant shareholders in S corporations, are restricted from making employer contributions to their own children’s accounts. While promoted as a tool for talent retention, early adoption remains modest, with only 4% of surveyed employers planning implementation in the 2026–2027 period.