Does Your Kid Get $1,000? See If They Qualify for a Trump Account

Trump Accounts are now available for kids 17 and younger. And if you gave birth to a child during President Donald Trump’s second term, they could get $1,000 just for signing up.

The key word here is “they” — not you, the parent. And they don’t get to access it until they turn at least 18. We’ll unpack all that in a bit. 

The accounts, which were created as part of Trump’s 2025 sweeping tax bill, offer Americans a new way to invest in their children’s financial future. They’re available to children who have not turned 18 before the end of the calendar year and who have a valid Social Security number. 

As part of the launch, the U.S. government will make a one-time contribution of $1,000 for U.S. citizens born between Jan. 1, 2025, and Dec. 31, 2028. Children under 10 who live in lower income areas could qualify for $250.

But how do you set up an account, where does the money come from and when can you access it? We’ll explain all that, plus alternatives you may want to consider.

What Are Trump Accounts?

Trump Accounts are a new kind of tax-advantaged investment account for children, created under a provision in the One Big Beautiful Bill Act. Parents or legal guardians can create an account, which is designed to help a kid get an early start on saving and investing. Children who are under age 18 and have a Social Security number can qualify for one account each.

Currently, the site only offers one ETF as an investment option, but the site says the U.S. Treasury plans to offer additional ETF options in the coming months. Your kid can convert the account to an IRA (or keep it as is), with IRA rules taking effect.

How Does a Kid’s Trump Account Get Funded?

Family, friends, employers, organizations and the U.S. government can all contribute money to a kid’s Trump Account. 

The maximum annual contribution limit for family and friends is $5,000 per child. Individual contributions aren’t tax deductible.

Employers can give up to $2,500 per year per employee. That amount counts toward the total $5,000 cap, but contributions aren’t considered taxable income for the employee.  

Contributions made by the government and nonprofit organizations don’t count toward the annual limit.

With the launch of the program, children born between Jan. 1, 2025, and Dec.31, 2028, will receive $1,000 from the U.S. government, so long as they are U.S. citizens with valid Social Security numbers. 

Kids under 10 who live in certain ZIP codes (generally, areas with median household incomes under $150,000) can receive $250 deposits thanks to a $6.25 billion gift from the Michael & Susan Dell Foundation. Children can only qualify for one of these gifts. 

When Can You Withdraw Money From Trump Accounts?

If you mean your kid, they can’t access the money until they turn 18, when your child can convert the account to an IRA or leave it as is. Either way, the account then becomes subject to the same rules for IRA withdrawals, which include a 10% penalty for withdrawals before age 59½. But there are penalty-free exceptions, including for first-time home purchases, higher education expenses and some medical costs. So your kid could use the money to pay for tuition or a down payment on a home.

Why Should I Create a Trump Account for My Kid?

If you have a young child who qualifies for either of the free money gifts, you should open an account for your kid. Even if you never touch the account after opening it, your kid will be eligible to withdraw the money at 18 or to start growing a retirement account. The Trump Account site projects that even if you contribute $0 after the initial $1,000 deposit, the account could be worth $6,000 when your child turns 18, based on S&P 500 historical performance.

The same goes if your employer offers free money contributions to your kid’s account — it doesn’t count as regular income, so there’s no reason not to sign up. It’s free money for your kid.

Why Shouldn’t I Create a Trump Account for My Kid?

For any kids who don’t qualify for free money gifts — and remember to check with your employer if they offer any contributions — the incentive to open a Trump Account is a little more limited. 

That’s because Trump Accounts are IRAs — essentially retirement accounts for your kids. You and your kid can’t access the money at all until they’re 18 (unless they’re disabled, then they can potentially access the money at 17). Which means you can’t access these funds for emergencies or early education expenses, unlike 529 plans. 

If you invest money in the account, they’ll technically have access to the money at 18, but they’ll pay taxes on the amount they withdraw, plus any penalties for withdrawals that aren’t qualified expenses. 

For most families, a 529 plan offers a lot more flexibility. While designed to help cover costs of higher education, many plans are expanding options to use the funds to pay for K-12 tuition at private schools, apprenticeship programs and certifications. If you’re struggling to fund a 529 — or an emergency account for your family — you may be better off not locking up additional contributions in a Trump Account for the next 18 years or so.

And we don’t want to suggest your little bundle of joy isn’t an angel, but at 18, the account becomes theirs — unlike a 529, which you control as the owner. If you diligently invest thousands in the account for years, your kid could turn 18 and decide to withdraw all the money (incurring taxes and penalties) to buy a new car or take a vacation — it’s their choice. Just something to keep in mind.

Alternatives to a Trump Account

In addition to a 529 plan, consider these alternatives before adding money to your kids’ Trump Account:

• Open a high-yield savings account. It’s best for an emergency fund, since you can grow your money safely while keeping it easily accessible. 
• Download a kid-friendly money app. Your kids can learn about investing, along with more basic money skills like budgeting and short-term savings goals. They can access their money through an ATM card, but you get to maintain control of the account.
• If your kid has a job, open a custodial Roth IRA. It’s similar to the Trump Account, but you have more control over the types of investments.  

How Do I Create a Trump Account for My Kid?

You can currently only open a Trump Account through the U.S. Treasury. To get started, you’ll need to sign in to your IRS account and submit Form 4547. Then you can download the app from trumpaccounts.gov and sign up for the account. You’ll need the following info:

• Your Social Security number
• Your child’s Social Security number
• Your child’s date of birth and address

Even if you don’t get any of the free money right now, it might not hurt to open an account for your kid. If you’re eligible for money down the road — like at a new employer who offers to fund the account as an employee benefit — it will make things easier for your kid to receive the gift.

Tiffany Wendeln Connors is senior managing editor at The Penny Hoarder and a Certified Educator in Personal Finance.