Treasury defines operating framework for new Trump accounts

The regulations establish a framework for an “authorized individual” to open an account on a child’s behalf.

If a pilot program election for the $1,000 contribution is made at the same time, the authorized individual is the person making that pilot program election (generally a parent or guardian who anticipates claiming the child as a qualifying child).

When no pilot program election is involved, the proposed regulations adopt a priority ordering similar to ABLE account rules:

1. Legal guardian
2. Parent
3. Adult sibling
4. Grandparent

An election to open an initial Trump account must be made on or before Dec. 31 of the year the child attains age 17. Elections are made on new Form 4547, Trump Account Election(s), or through a forthcoming electronic portal (see www.trumpaccounts.gov for up-to-date information on the portal and more), and are independent of any income tax return filing.

If an election is submitted by an individual who is not an authorized individual, the regulations provide a taxpayer-favorable rule: the Secretary of the Treasury is deemed to have made the election. This rule prevents the account from being invalidated due to errors in who made the initial election.

A Trump account is a traditional IRA with special statutory restrictions. Among other rules:

• The account must be designated and titled as a Trump account at inception; existing IRAs cannot be converted into Trump accounts.
  
  
• An individual may have only one Trump account holding funds at a time. A Trump account may be rolled over to another trust, but because the child can only have one Trump account, the full amount in the Trump account must be rolled over to the new Trump account. The regulations provide that to be qualified, the rollover must be accomplished by a trustee-to-trustee transfer.
  
  
• Trump accounts cannot be SIMPLE IRAs (Savings Incentive Match Plan for Employees Individual Retirement Account) and cannot receive simplified employee pension (SEP) contributions.
  
  
• Nonbank trustees approved to administer IRAs as of Dec. 31, 2025, are automatically approved to act as Trump account trustees; later applicants must seek specific approval.

By default, the individual who makes the election becomes the responsible party authorized to manage the account on behalf of the minor beneficiary, subject to applicable law and the account agreement. Notably, the regulations acknowledge that state law or other rules may apply.

The $1,000 contribution is available only for an eligible child who is a U.S. citizen with a Social Security number, is the qualifying child of the individual making the election and was born in calendar years 2025 through 2028. A child is disqualified by a prior election only if that election has been made and processed by the IRS, protecting children from erroneous or malicious filings that were never acted upon.

The $1,000 governmental contribution is only available as a contribution to an established Trump account. If no account exists, the contribution is not paid in any other form.

The pilot program election is made by a parent or guardian on Form 4547 or through the online portal. For a child born during 2025–2028, an election to set up a Trump IRA may be made from the date the child becomes eligible through Dec. 31 of the year the child turns 17, though most families would want to make the election earlier so that the Trump account balance can grow over time.

The regulation clarifies that the amount can be deposited shortly after birth, maximizing potential investment growth.

The NPRM indicates that the Treasury Department and the IRS intend to issue future guidance addressing the employer-sponsored Trump account contribution program, permitted under new section 128, at a later date.