A federal savings program created under the Working Families Tax Cuts lets more than a parent open an investment account for a young child. Parents, guardians, and other relatives — grandparents included — can request one of the new Trump Accounts for any minor with a Social Security number, and if that child was born between January 1, 2025, and December 31, 2028, the federal government deposits a one-time $1,000 seed contribution once the account is elected. The Internal Revenue Service reported that more than 4 million children had already been signed up by the end of March, with over 1 million of those elections claiming the $1,000.
The $1,000 Pilot Contribution’s Birth-Year Window
The Trump Account is a new type of traditional IRA created under Section 70204 of the Working Families Tax Cuts, and the federal government’s contribution is not automatic for every account holder. Only a child who is a U.S. citizen, holds a valid Social Security number, and was born between January 1, 2025, and December 31, 2028, qualifies for the one-time $1,000 pilot deposit; a Trump Account opened for an older or younger child still exists as a savings vehicle but receives no government money attached to it. The account cannot be funded at all before July 4, 2026, and money inside it generally cannot be withdrawn before the year the beneficiary turns 18, after which it converts to a traditional IRA with the same tax treatment.
To qualify for a Trump Account at all, a child needs only a valid Social Security number and to be under 18 in the year the election is made — citizenship is not required for the account itself. The $1,000 pilot deposit sets a narrower bar on top of that: the child must also be a U.S. citizen, which means a lawful permanent resident child, for example, could have a Trump Account opened but would not receive the federal seed money.
Requesting the account and the pilot contribution both run through the same one-page form. A parent, guardian, or other individual who qualifies to make the election files Form 4547 through the IRS Individual Online Account, checking a box to claim the $1,000 if the child meets the birth-year and citizenship rules, and the election can be filed with the same return used to claim other tax-year 2025 benefits. By the time the IRS reported its first participation numbers, more than 4 million children nationwide already had accounts open, and better than 1 million of those elections had claimed the pilot money.
At $1,000 apiece, the more than 1 million pilot elections reported by the IRS in March represent north of $1 billion in federal seed money already committed to Trump Accounts, before any parent, relative, or employer adds a cent on top. That total will keep climbing as more eligible children are enrolled with future tax returns, since the birth-year window stays open through the end of 2028.
Free retirement updates: Miss an enrollment or claim deadline and it may be gone. Our free Retirement Shield newsletter keeps readers ahead of the ones that matter. Get the free newsletter.
Grandparents and Other Relatives Can Fund the Account
The word most people default to when they hear about a new child savings program is “parent,” but the IRS’s own guidance is broader. Its account-establishment rule allows parents, guardians, and other authorized individuals to request a Trump Account for an eligible minor, and its funding rule goes further still: eligible children may receive deposits from parents, relatives, friends, employers, state governments, philanthropic organizations, and individuals, subject to an annual cap. That combination is what puts a grandparent, an aunt, or a family friend on the same footing as a parent when it comes to adding money to a child’s account after it is opened.
The annual ceiling on those combined contributions is $5,000 per child, a figure the IRS lists as the total allowed from individuals and employers together in a single year. An employer that wants to contribute on behalf of a worker’s child can add up to $2,500 of that total tax-free, under a separate set of rules the agency issued in August — a detail that affects the same family’s total room but sits outside the pilot contribution itself.
The Investment Rules Are Still Proposed, Not Final
One piece of the Trump Account framework is not yet settled. Treasury and the IRS issued proposed regulations on eligible investments on August 20, spelling out that money inside a Trump Account must go into a mutual fund or exchange-traded fund tracking a broad U.S. stock index such as the S&P 500, without leverage, and with annual fees capped at 0.1% of the balance — rules that would apply to tax years beginning on or after January 1, 2026, once finalized. Until then, the proposal governs by notice, and the agencies are taking public comment on it through October 20, 2026.
The August proposal did not appear without warning; it followed a formal comment period that opened under Notice 2025-68 in December 2025, when Treasury first asked fund managers, trustees, and family advocates what an “eligible investment” should look like before writing a formal rule. The investment restriction only applies during what the IRS calls the account’s “growth period,” which starts when the child’s account is first established and runs through December 31 of the year the child turns 17.
If a family never selects a specific fund, the account’s trustee is required to invest the money automatically in an eligible option rather than leave it in cash, and once the growth period ends, the eligible-investment restriction falls away entirely.
What is not proposed, and not waiting on a comment period, is the $1,000 itself: that piece of the program is already running, already flowing into millions of accounts, and already available to any birth-year-eligible child whose parent or other qualifying relative files the one-page election. The part still being written is the fine print on where that money — and everything a grandparent or employer adds on top of it — is allowed to sit for the next 18 years.
This article was drafted with AI assistance and edited for accuracy.
More Financial Reading
