As the 2025 tax season approaches, parents of young children may hear about a new savings option called a Trump Account. Along with it comes a new IRS form, Form 4547. These accounts are part of a federal program designed to help families save for a child’s future.
This guide breaks down what Trump Accounts are, what Form 4547 does, and what families should know before filing.
What Is a Trump Account
A Trump Account is a long term savings account for children under age 18. The goal is to help families build savings for a child over time. These accounts come with strict rules on when money can be added and when it can be taken out.
A Trump Account is treated as a special type of retirement account for a child, similar to an IRA, but with its own rules during the growth period.
One important point is that although you can register for an account with your 2025 tax return, contributions cannot be made until July 4, 2026. That includes contributions from parents, employers, charities, or the government.
What Is IRS Form 4547
Form 4547 is the form used to register a child for a Trump Account. It is a one page form, but it has two main purposes.
- First, it allows an authorized adult to elect to open a Trump Account for a qualifying child.
- Second, it allows that adult to request a one time $1,000 federal pilot contribution if the child qualifies.
Requesting the $1,000 is not automatic. You must actively check the box asking for it. Simply opening the account does not trigger the deposit.
Each Form 4547 can list up to two children. If you have more than two eligible children, you can file additional forms. The form also asks for a responsible party. This is the person who will work with the Treasury Department to set up and manage the account. The person signing the form is confirming they are authorized to open the account for that child.
Who Can Open a Trump Account
The IRS sets an order for who can open a Trump Account for a child. Priority generally goes to:
- A legal guardian
- Then a parent
- Then an adult sibling
- Then a grandparent
If you are also requesting the $1,000 pilot contribution, the rules are stricter. You must reasonably expect that the child will qualify as your qualifying child under IRS rules for that tax year.
You do not have to have already claimed the child as a dependent to file Form 4547. However, requesting the pilot contribution signals that you expect the child to meet the qualifying child rules, so families should be confident about eligibility before checking that box.
Before Filing Form 4547
Before filing, families should confirm
- The child is under 18 and has a valid Social Security number
- You qualify as an authorized individual
- If requesting the $1,000, the child is expected to be your qualifying child
- You understand no contributions can be made before July 4, 2026
- You are prepared to complete identity verification in 2026
When and How to File
Form 4547 can be filed with your 2025 tax return, either electronically or on paper.
The IRS also plans to allow filing through an online portal after tax season.
After your election is accepted, the Treasury will contact the responsible party with instructions to activate the account. This process is expected to begin in May 2026 and will require identity verification.
Until activation is complete, the account is not fully operational.
Contribution Limits
Trump Accounts have a $5,000 annual contribution limit. This limit applies to money added by family members and through employer programs.
Employer contributions are included in the $5,000 limit and generally cannot exceed $2,500 per year. The benefit is that employer contributions are not counted as taxable income.
Some contributions do not count toward the $5,000 limit. These include:
- The $1,000 federal pilot contribution
- Certain government or charitable contributions
- Certain rollovers
Understanding After Tax Contributions
Money added by parents or grandparents from after tax dollars creates what is called basis. In simple terms, this means that money has already been taxed once and should not be taxed again when withdrawn later.
Tracking this is important. When the child turns 18, withdrawals may be partly taxable and partly tax free. Good recordkeeping helps prevent double taxation on after tax contributions.
Withdrawal Rules
Trump Accounts are meant for long term savings.
Withdrawals are generally not allowed before the child turns 18.
Limited exceptions include
- Correcting excess contributions
- Rolling into another Trump Account
- Distribution after the beneficiary’s death
- Certain rollovers to ABLE accounts starting at age 17
Hardship withdrawals are not allowed. You also cannot simply close the account early because circumstances change. Once the beneficiary turns 18, the account works more like a traditional retirement account and most restrictions are lifted.
Investment Restrictions
These accounts have strict investment rules. Investments must generally track U.S. stock indexes and cannot use leverage. Annual fees are capped at a low level.
Cash and money market funds are usually not allowed except in limited situations.
Trustees must monitor investments to ensure they stay within the rules.
Final Thoughts
Trump Accounts are a new and complex program. For some families, they may become a useful long term savings tool. For others, the restrictions and timing may make them less appealing.
If you are considering filing Form 4547 or requesting the pilot contribution, it is a good idea to review your situation carefully and speak with a DJL tax professional.