Thursday June 4, 2026

Washington News

Child IRA Accounts Launched

The Department of Treasury has announced the activation of the new child IRA accounts also known as "Trump Accounts." These tax-deferred accounts formally launch later this summer.

Treasury Secretary Scott Bessent reports that six million children have been enrolled in the Section 530A Trump Accounts. Parents and other qualified adults are submitting IRS Form 4547, Trump Account Election(s) to enroll. The Treasury also launched a smartphone app for the Trump Accounts. The smartphone app is controlled by the Department of Treasury, but it was developed by Bank of New York Mellon Corp. and Robinhood Markets, Inc.

The smartphone app enables enrollment of children, contributions to Trump Accounts and tracking the investments. The Treasury plan is to have investment funds "in a diversified portfolio of low-cost index funds designed to maximize long-term growth while minimizing risk."

Secretary Bessent stated, "I think this is going to be one of the greatest real-time financial literacy educations in history. American families are going to be able to look on their phone every day and see, and I think it is going to drive people to try to understand what they have got here. I think we are going to create a generation of shareholders."

On May 28, 2026, the Internal Revenue Service (IRS) published a letter that explains the new accounts. The IRS encourages parents to submit Form 4547, Trump Account Election(s). IRS CEO Frank J. Bisignano stated, "These new features reflect our continued focus on transforming the IRS into a digital-first agency that delivers a faster, more seamless experience for taxpayers and provides a new tax-advantaged investment account for children to save for college, retirement, and building generational wealth.”

The U.S. Census Bureau estimates there are 73 million Americans under the age of 18. With six million accounts, 67 million additional children can sign up for this benefit. If parents give $5,000 per year from birth to an account, with an added seed of $1,000 from the federal government to eligible children, the child’s IRA could be worth about $150,000 or more by age 18. If the child holds this account in an index fund with an 8% return, by age 65 it could grow tax-free to over $5,000,000.

Editor's Note: The official opening date for the Trump accounts will be July 4, 2026. Children born during 2025 through 2028 will be able to receive a $1,000 contribution from the federal government. There may also be contributions by the state government or the employer of the parent. Companies are permitted to give up to $2,500 per year to benefit children of employees within the total cap of $5,000.