Trump Accounts Under IRC §530A: A New Tool for Multigenerational Wealth Planning

The One Big Beautiful Bill Act introduced a new tax-advantaged savings vehicle under IRC §530A, commonly referred to as a “Trump Account.” While the government’s $1,000 seed contribution has generated significant attention, these accounts may also provide a straightforward, tax-efficient way to begin building wealth for future generations. 

The Basics 

A Trump Account is a tax-advantaged account established for a child under age 18. While it is generally treated similarly to a traditional IRA, it has its own contribution, investment, and distribution rules. Any U.S. child under age 18 with a Social Security number is eligible, and the account is held in the child’s name, with a parent or guardian serving as custodian until age 18. 

Key features include: 

• Contribution limit: Up to $5,000 per beneficiary annually (excluding qualified rollovers and government contributions), subject to inflation adjustments. 

• Government pilot program: For U.S. children born between 2025 and 2028, the federal government makes a one-time $1,000 contribution. 

• Investments: During the child’s minority, funds must generally be invested in low-cost mutual funds or ETFs tracking broad U.S. equity indexes (such as the S&P 500). 

• Distributions: Generally restricted until the beneficiary reaches age 18, after which more traditional IRA rules begin to apply. 

Gift Tax Implications 

Beyond serving as a savings vehicle, Trump Accounts may offer families another way to transfer wealth to future generations. 

When these accounts were originally introduced, there was initial uncertainty about whether a contribution of this kind would be treated as a gift of a future interest and, therefore, would not qualify for the annual gift tax exclusion under IRC §2503(b). Unlike Section 529 plans, the Trump Account statutory framework does not specifically address how contributions are treated for gift tax, GST tax, or gift tax reporting purposes. In response to these concerns, the IRS and Treasury issued Revenue Procedure 2026-25, confirming that cash contributions to a Trump Account are treated as completed gifts of present interests rather than future interests. As such, a gift tax return (Form 709) is not required to be filed for these contributions if the following safe harbor conditions are satisfied: 

• The donor is an individual. 

• The total gifts to the specific beneficiary during the calendar year (including the Trump Account contribution) stay within the annual gift tax exclusion limit ($19,000 for 2026) and the lifetime gift, estate, and GST tax exemption ($15 million, indexed annually). 

• The contributions occur before the calendar year the beneficiary turns 18. 

• No gift tax return is otherwise required to be filed by the donor for that year. 

If any condition is not met, the donor must file a gift tax return to report contributions made to each Trump Account beneficiary during that tax year.  

Estate Planning Considerations 

From an estate planning perspective, this creates an opportunity to shift future appreciation outside of a parent or grandparent’s taxable estate. While $5,000 per year may seem modest, a grandparent with several grandchildren can fund multiple accounts and allow decades of investment growth to accumulate outside the estate. The $5,000 annual cap applies per beneficiary, making coordination among family members important. If multiple family members contribute independently, the limit could be exceeded. 

How It Fits Alongside Other Planning Tools 

Trump Accounts should be viewed as a complement to existing planning strategies. A 529 plan may be a better fit for education funding, while trusts offer broader asset protection and wealth transfer opportunities. Trump Accounts can serve a different purpose as a simple, long-term savings vehicle for younger generations. 

Looking Ahead 

Because Trump Accounts are still new, additional Treasury and IRS guidance is expected. As guidance continues to evolve, your Tolleson team can help evaluate whether these accounts fit within your broader estate, gifting, and family wealth planning objectives.