Understanding 530A Accounts (‘trump accounts’)

The new federal program known as “Trump Accounts” has now been formalized as 530A Accounts—a new category of federally administered savings accounts designed to get children invested in the stock market from birth. While some details are still emerging, the core structure is already clear enough to act on.

What is a 530A Account?

• Federally administered investment account with limited, low-cost investing options (designed to mirror index funds)

• Funds cannot be withdrawn until after a child turns 18

• Distributions are taxable

• Funds can only be used for limited purposes (penalties apply for ineligible withdrawals)

For most families, other investing vehicles (like 529 accounts or even taxable brokerage accounts) are likely to make more sense for investments.

Why should I open one for my child?

Free money.

• $1000 deposits into accounts for US citizens born between 2025-2028.

• $250 for children under 10 born before 2025 who live a ZIP code where the median income is under $150k

• Private donors have pledged additional funds for children in Connecticut and Indiana

• A number of large employers have committed to match employee contributions to their children’s 530A accounts. (Employees can receive up to $2,500 per year tax free this way).

Even though 530A Accounts do not appear to be efficient long‑term investment vehicles, the deposits themselves are worth capturing. There is no downside to opening the account, receiving the funds, and just leaving the account alone until your child is old enough to access it.

What do I need to do?

If you have a child eligible for the $1000 or $250 contributions, I’ll include the signup form – IRS Form 4547 (because narcissism) – with your tax return.

If your child isn’t in the eligible age range for those, but your employer is matching contributions and you want to take advantage of that (which you probably should), let me know and I can add an enrollment form for you.

What to Expect Next

As Treasury releases additional guidance, I’ll update clients on:

• eligibility criteria

• deposit amounts and timing

• any required elections

• how the accounts interact with your tax return

• whether any planning opportunities emerge beyond the initial deposits

For now, the action item is straightforward:

If you’re eligible, open the account and accept the free deposits.