New parents already have a lot to deal with—little sleep, finding formula, and fitting doctor visits into busy workdays. Now there’s one more thing to think about: a new tax form that could give your child $1,000 from the federal government.
If your baby was born in 2025, or will be born anytime through 2028, a new government program called the Trump Account could become an important way to help your child financially. But there’s a problem. The money doesn’t come automatically. Parents have to fill out a form and open an account first. If they don’t, their child doesn’t get the money. That’s what researchers are worried about.
What is a Trump Account, really?
Trump Accounts are federally backed, tax-deferred child savings accounts created under the One Big Beautiful Bill Act of 2025. The idea is simple: give kids a financial head start at birth, let the money grow, and restrict access until adulthood.
If a child qualifies, the U.S. Treasury will deposit $1,000 one time into the account. That money is invested in a low-cost U.S. stock market index fund—think broad exposure like the S&P 500, not crypto or gold.
The goal isn’t to pay for diapers or daycare. It’s long-term wealth building. College. A first home. A small business. Something tangible that says, you’ve got a shot.
Who qualifies for the $1,000 contribution?
Eligibility is narrower than some parents expect.
To qualify for the federal $1,000 pilot contribution, a child must:
- Be a U.S. citizen
- Have a valid Social Security number
- Be born between Jan. 1, 2025, and Dec. 31, 2028
Children born earlier can still have Trump Accounts opened for them, but they won’t qualify for the $1,000 federal seed money.
That distinction matters, especially for families racing to get paperwork done after a birth.
The key problem: no automatic enrollment
Unlike many modern 401(k) plans, Trump Accounts do not enroll children automatically.
Parents or legal guardians must actively opt in. That means filing a brand-new tax form, IRS Form 4547, or using a forthcoming IRS online portal expected to launch in mid-2026.
And yes, that friction could be costly.
William Elliott III, a University of Michigan professor who has spent two decades studying child savings accounts, worries participation could stall.
“If they don’t do automatic enrollment, you’d never get full participation or anything close to it,” Elliott said.
Based on past research, he estimates participation could land around 40% to 50% even with aggressive outreach—and lower if families aren’t clearly informed.
That’s not a hypothetical concern. It’s exactly what researchers saw before automatic enrollment became common in workplace retirement plans.
The new tax form parents need to know about
Here’s the paperwork parents should put on their radar now.
| Requirement | Key Detail |
|---|---|
| Form name | IRS Form 4547 |
| Purpose | Elect to establish a Trump Account |
| When available | Draft released Dec. 2025; final version pending |
| When to file | With your 2025 tax return in 2026 |
| Contributions allowed | Beginning July 4, 2026 |
According to IRS guidance published Dec. 2, parents can file the form with their tax return or through an IRS online tool. Treasury will then initiate an authentication process to activate the account.
More official details are expected at https://www.trumpaccounts.gov and through IRS updates at https://www.irs.gov.
Why researchers support child savings accounts
Elliott isn’t some political cheerleader. He’s a social work professor who grew up experiencing homelessness in Beaver Falls, Pennsylvania, during the steel mill collapse of the late 1970s.
What his research shows is striking: even small savings accounts change behavior.
Families with child development accounts are more likely to believe college is attainable. Kids perform better in school. Financial literacy stops being theoretical.
Elliott calls it “forming tangible hopes.”
Some studies also suggest these accounts reduce family stress and may help ease symptoms of maternal depression. Not because the money solves everything—but because it changes expectations.
States that already do this—and what they’ve learned
This idea didn’t originate in Washington.
San Francisco launched the Kindergarten to College (K2C) program back in 2011, automatically opening savings accounts with $50 for every public school kindergartener. Maine offers a $500 seed grant for newborns and switched to automatic enrollment in 2014.
The lesson was consistent: automatic enrollment drives participation. Opt-in systems leave families behind.
A surprise boost: $250 from Michael and Susan Dell
Some families may see more than just $1,000.
On Dec. 2, the White House announced that Michael and Susan Dell will commit $6.25 billion to supplement Trump Accounts. The plan adds $250 for up to 25 million children age 10 and under who live in ZIP codes with median incomes below $150,000.
In Michigan, an analysis from Poverty Solutions at the University of Michigan found only 12 ZIP codes statewide exceed that income threshold—none in Detroit.
The Dell contribution prioritizes children born 2016–2024, with more details expected in early 2026. Official updates are expected via White House briefings at https://www.whitehouse.gov.
How Trump Accounts work once opened
Trump Accounts come with guardrails.
- Investments are limited to broad U.S. equity index funds
- Annual fees are capped at 0.10%
- The $1,000 federal contribution cannot be withdrawn before age 18
- Annual contributions from family and others are capped at $5,000, adjusted for inflation after 2027
- Charities and government entities can contribute beyond that cap
Parents won’t be stuck forever with a single provider. The White House says trustee-to-trustee rollovers to private brokerages will be allowed later.
Bipartisan backing, quietly
Despite the branding, the policy has bipartisan fingerprints.
In early December, Sens. Cory Booker and Ted Cruz jointly urged Fortune 1000 CEOs to support these child investment accounts, calling them “a transformative tool for building long-term financial security.”
Booker’s earlier “Baby Bonds” proposal laid much of the conceptual groundwork.
In today’s climate, that kind of crossover is rare.
Not a silver bullet—but still meaningful
H. Luke Shaefer, director of Poverty Solutions at the University of Michigan, supports the principle but urges realism.
For families struggling with food or housing insecurity, a locked-up savings account doesn’t replace programs like SNAP. And for middle-income savers, 529 plans may still be a better place for additional contributions.
Still, Shaefer agrees the $1,000 seed money itself is a real benefit.
The money won’t pay today’s bills. But over 18 years, invested in the market, it could quietly grow into something that changes a young adult’s options.
What parents should do next
If you’re expecting a baby—or already juggling one—you don’t need to act today. But you do need to remember 2026.
Put this on your calendar:
- File IRS Form 4547 with your 2025 tax return
- Or use the IRS online portal when it launches
- Watch for updates at https://www.irs.gov and https://www.trumpaccounts.gov
No one enjoys extra paperwork. But missing this could mean leaving real money—and long-term opportunity—on the table.
Sometimes building wealth starts with filling out one unglamorous form.
FAQs
1. Can I open a Trump Account for a child older than a newborn?
Yes. Children under 18 can have accounts opened, but only those born 2025–2028 qualify for the $1,000 federal contribution.
2. When can contributions begin?
Contributions begin July 4, 2026.
3. Can grandparents or employers contribute?
Yes. Family members, friends, employers, charities, and government entities may contribute.
4. How is the money invested?
Only in broad U.S. equity index funds with fees capped at 0.10%.
5. Can the money be withdrawn early?
The federal $1,000 generally cannot be accessed before age 18.
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