Trump Accounts: IRS and Treasury issue proposed rules for account setup and $1,000 pilot deposit

The Treasury Department and IRS released proposed regulations on opening Trump Accounts and how a $1,000 pilot deposit for eligible children will work. The rules set election steps using Form 4547, investment limits, filing deadlines, and will be followed by a public comment period before final rules.

The Treasury Department and the Internal Revenue Service issued proposed regulations outlining how families can open Trump Accounts and how a one-time $1,000 pilot deposit for eligible children will operate. Trump Accounts were created by the One Big Beautiful Bill Act of 2025 as a tax-advantaged savings vehicle for children, with initial federal deposits for eligible newborns. The guidance aims to clarify the election process, responsible-party rules, investment parameters, and timing ahead of account funding dates beginning in 2026. Treasury and the IRS will accept public comments on the proposed rules before finalizing guidance. Key details: - The Treasury and IRS issued proposed regulations describing the election process, responsible-party rules, and investment parameters for Trump Accounts. - Parents or another authorized individual must elect to open a child's initial Trump Account using Form 4547, either by filing the one-page form with a tax return or via an IRS online portal, no later than December 31 of the year the child turns 17. - The same Form 4547 may be used to request the one-time $1,000 pilot contribution for eligible children; English and Spanish versions of the form and instructions will be available on IRS.gov. - If the $1,000 pilot election is made at account opening, the electing individual is typically the person who anticipates the child will be their qualifying child for that year; if no pilot election is made, the proposed order of priority to open an account is legal guardian, parent, adult sibling, then grandparent. - Trump Accounts will receive a $1,000 federal deposit for eligible children, allow additional contributions from individuals and employers subject to annual limits, restrict investments to index-tracking mutual funds or ETFs focused on U.S. equities, and generally prohibit withdrawals before the calendar year the beneficiary turns 18. - Program materials note contributions cannot be made before July 4, 2026, employers can contribute up to $2,500 annually without the amount counting as employee taxable income, and the overall annual contribution cap is $5,000 indexed to inflation. Summary: The proposed regulations move the government closer to operationalizing Trump Accounts by clarifying who may open accounts, how elections are made, and what investments are permitted. Treasury and the IRS will solicit and review public comments on the proposal before issuing final rules. Account funding and contribution rules are scheduled to begin in 2026, with some contribution provisions not effective before July 4, 2026.