The Department of the Treasury and the Internal Revenue Service (IRS) today issued proposed regulations concerning eligible investments for Trump Accounts, a new type of traditional Individual Retirement Arrangement (IRA) established under the Working Families Tax Cuts. These regulations aim to provide clarity for trustees and beneficiaries, guiding investments for children's future financial needs.
During a "growth period" that lasts until the beneficiary turns age 17, funds in a Trump Account must be invested in eligible investments. These generally include mutual funds or exchange-traded funds (ETFs) that track an equity index of primarily U.S. companies, such as the S&P 500 index, do not use leverage, and have annual fees and expenses of no more than 0.1 percent. If a beneficiary does not select an investment, the trustee will automatically invest the funds in an eligible option. These rules are set to apply to tax years beginning on or after January 1, 2026.
IRS Chief Executive Officer Frank J. Bisignano said, "These proposed regulations will provide clarity for trustees and beneficiaries of Trump Accounts, thus encouraging eligible participants to invest in low-fee mutual funds and ETFs that will grow on a tax-deferred basis potentially over their entire lives." He added, "Funds deposited in Trump Accounts enable American children to start investing now and enjoy years of compound earnings for their future college, retirement and other needs."
Parents, guardians, or other authorized individuals can open a Trump Account for a child with a Social Security number by completing Form 4547, Trump Account Election(s), via the IRS Individual Online Account before the child turns 18. A pilot program offers a $1,000 contribution for U.S. citizen children born between 2025 and 2028. The Treasury and IRS are also requesting additional public comments on these proposed regulations by October 20, 2026.