What Parents Need to Know About the New “Trump Accounts” Under the Working Families Tax Cuts

Sharonda Thomas
Dec 3
3 min read

The IRS has officially released new guidance on an important benefit for families: Trump Accounts, a new type of individual retirement account (IRA) designed specifically for children under the Working Families Tax Cuts.

If you’re welcoming a new baby—or have younger children in your home—this is a financial tool you’ll want to understand. It has the potential to give children a powerful head start in long-term savings and generational wealth.

Here’s what parents, guardians, and caregivers need to know.

What Is a Trump Account?

A Trump Account is a newly introduced individual retirement account (IRA) established for a child.

The goal:

✔ Support working families

✔ Encourage early financial stability

✔ Build long-term savings and retirement foundations for children

It works similarly to a traditional IRA, but with special rules to protect the funds until the child becomes an adult.

How Does It Work?

According to the new IRS and Treasury guidance:

1. A $1,000 Pilot Program Contribution Is Available

Families may be eligible for a $1,000 contribution to open the account, depending on the program’s rollout and requirements.

The guidance outlines:

• How the contribution is made

• Who qualifies• How funds must be handled

• When additional contributions can be made

This makes it easier than ever to start building early savings for your child.

2. Funds Are Locked Until the Child Turns 18

Money placed in a Trump Account cannot be withdrawn until January 1 of the year the child turns 18. This means the account is protected, grows tax-advantaged, and cannot be accessed early—even by the parent or guardian.

3. After Age 18, It Converts to a Traditional IRA

Once the child reaches 18, the Trump Account becomes a standard traditional IRA, following all normal IRS rules around contributions, growth, and withdrawals. This gives your child an automatic jumpstart on retirement savings before they’ve even earned their first paycheck.

Why This Matters for Families?

Welcoming a new baby already comes with expenses—but this new tax benefit is designed to lighten the long-term financial load by offering:

✔ Early compound growth

✔ Tax-advantaged savings

✔ A foundation for lifelong financial literacy

✔ A jumpstart on future retirement stability

✔ Generational wealth opportunities

Beginning retirement savings at birth creates an advantage many adults today wish they had.

How to Create a Trump Account?

The IRS guidance walks families through:

• How to open an account

• Eligibility requirements

• Documentation needed

• How contributions work

• How to manage the account responsibly

Read the full IRS guidance here:🔗 https://ow.ly/nYLo50XBrVx

Who Should Consider This Benefit?

You should explore Trump Accounts if you:

• Are expecting a child

• Recently welcomed a new baby

• Have young children at home

• Want to build generational wealth

• Want to maximize new tax benefits

• Are looking for ways to save smarter, not harder

Even small contributions now can grow significantly over the next 18+ years.

Need Help Understanding the New Rules?

Thomas Innovative Solutions is here to help families and individuals navigate new IRS rules, tax law changes, and strategic planning opportunities.

If you want help with:

✔ Tax planning

✔ Understanding eligibility

✔ Setting up accounts

✔ Building financial strategy for your family

Staying tax-smart is the best gift you can give your family—and your future.