amilies looking for another way to save for a child's future may want to consider Section 530A accounts. Created by last year's One Big Beautiful Bill Act, these tax-advantaged savings accounts, also known as ''Trump Accounts,'' are designed to help children build long-term assets. The ability to contribute became available on July 4, 2026. And some children may be eligible for a $1,000 government-funded deposit.
The basics
A 530A account can be established for any U.S. citizen who'll be under age 18 at the end of the tax year and who has a Social Security number. Eligible children born from January 1, 2025, through December 31, 2028, may also qualify for the $1,000 government contribution.
You can set up a 530A account by filing Form 4547, ''Trump Account Election(s),'' through the online portal, trumpaccounts.gov. You can then track Form 4547 through your IRS online account.
You and any other individual, such as a grandparent, can make annual contributions up to a combined limit of $5,000 (adjusted for inflation starting in 2028) until the year your child turns 18. The $1,000 government contribution doesn't count against the annual limit.
Beyond family contributions
Employers may establish programs to contribute to employees' 530A accounts. An employer can generally contribute up to $2,500 annually (adjusted for inflation beginning in 2028) for an eligible employee or dependent under age 18. (The annual employer contribution limit is $2,500 per employee, regardless of the number of eligible dependents.)
These contributions count against the $5,000 annual contribution limit. Employer contributions are excluded from the employee's taxable income.
Tax benefits and account rules
Contributions aren't deductible for individual contributors, but account earnings grow taxdeferred as long as they remain in the account. Generally, no distributions can be taken before the year your child turns 18.
Until age 18, investments are limited to certain eligible mutual funds and exchange-traded funds that satisfy IRS requirements. In the year your child turns 18, the account will transition into a traditional IRA. It then becomes subject to the rules governing traditional IRAs. Future contributions generally require earned income and may be deductible if your child is eligible.
Also, starting with the year your child turns 18, distributions can be taken. But the distributions will generally be at least partially taxable, and IRA early withdrawal penalties could also apply.
Seeking guidance
These accounts may provide significant long-term savings benefits. Consider how a 530A account fits into your overall financial strategy. If you need guidance, we're available to assist.
Sidebar: Finding the best option
Before making contributions to Section 530A accounts, consider whether other tax-advantaged savings options might better achieve your goals. For example, if your primary objective is funding a child's education, a Section 529 plan may be a better fit. Distributions used for qualified education expenses are tax-free, and some or all of a remaining balance may eventually be converted tax-free to a Roth IRA, subject to applicable requirements and limits.
If you determine that a 529 plan or other savings vehicle is better for your family, but your child would be eligible for the $1,000 government contribution to a 530A account, seriously consider opening one. Even if you never make a contribution, the tax-deferred compounding growth on $1,000 can lead to a substantial balance over time.