The IRS announced earlier this year that more than 4 million children have been enrolled in Trump Accounts, the new tax-advantaged savings vehicle created under the One Big Beautiful Bill Act (OBBBA). With enrollment passing that milestone, the agency also released Form 4547 and guidance on how parents, employers, and financial institutions interact with the accounts.

What a Trump Account Is

A Trump Account is a type of traditional individual retirement account (IRA) established for a child who has not turned 18. Contributions grow tax-deferred. During the account’s growth period, distributions are restricted. Starting January 1 of the year the child turns 18, the rules that generally apply to traditional IRAs apply to the account, including a possible additional tax on early distributions unless an exception applies. Children born after December 31, 2024, and before January 1, 2029, who are U.S. citizens with a valid Social Security number, are eligible for a one-time $1,000 federal pilot contribution. No pilot contribution is deposited before July 4, 2026.

Contribution Rules

• Total contributions during the growth period are subject to an annual limit of $5,000 per child, indexed for inflation after 2027. This $5,000 limit includes employer contributions made under Section 128.
• An employer may contribute up to $2,500 per year per employee under a Section 128 Trump Account contribution program. The contribution is excluded from the employee’s income and counts toward the $5,000 annual limit.
• The $1,000 pilot contribution, qualified general contributions (from states, the United States, the District of Columbia, tribal governments, or 501(c)(3) organizations), and qualified rollover contributions are not subject to the annual contribution limit.
• Contributions are not deductible, and earnings grow tax-deferred.

Form 4547, Trump Account Election(s)

Form 4547, Trump Account Election(s), is the form an authorized individual uses to elect to open an initial Trump Account for a child and to request the one-time $1,000 pilot program contribution. The $1,000 contribution is available for an eligible child born after December 31, 2024, and before January 1, 2029, who is a U.S. citizen with a valid Social Security number and who has not reached age 18 by the end of the year the election is made.

As of mid-2026, taxpayers can complete this step online. Through the IRS Individual Account, an authorized individual can view the latest submission status of Form 4547, see the next steps, and submit the form electronically rather than on paper. Electronic submission speeds up processing and reduces the delays that come with paper filing. More detail is available at trumpaccounts.gov.

What Employers Should Know

An employer that offers Section 128 Trump Account contributions reports them on the employee’s Form W-2 in box 12 using code TA. The contribution is excluded from the employee’s income but is reported for information purposes. Contributions cannot be made before July 4, 2026, so small businesses weighing this benefit have time to confirm payroll-system readiness before they start.

How BCA Can Help

Trump Accounts are new, and the interaction with existing 529 plans, custodial accounts, and employer benefit programs is going to drive a lot of questions over the next year. Business Compliance Associates can help families decide whether to open an account, evaluate how it fits with other education and savings vehicles, and help small business owners structure a Section 128 contribution program that meets the reporting rules. We bring business and compliance experience to that planning and coordinate with a trusted tax advisor when it is time to put numbers on a return.

Sources

1. IRS, “Trump Accounts.” https://www.irs.gov/trumpaccounts
2. IRS, “Taxpayers can now view and submit Trump Account elections in their IRS Individual Account” (IR-2026-68). https://www.irs.gov/newsroom/taxpayers-can-now-view-and-submit-trump-account-elections-in-their-irs-individual-account
3. IRS, “Instructions for Form 4547, Trump Account Election(s)” (Rev. December 2025). https://www.irs.gov/instructions/i4547
4. IRS, “General Instructions for Forms W-2 and W-3 (2026)” (box 12, code TA). https://www.irs.gov/instructions/iw2w3
5. IRS, “Treasury, IRS issue guidance on Trump Accounts; notice announces upcoming regulations” (Notice 2025-68). https://www.irs.gov/newsroom/treasury-irs-issue-guidance-on-trump-accounts-established-under-the-working-families-tax-cuts-notice-announces-upcoming-regulations

This information is provided for general educational purposes and reflects opinions based on experience. It is not licensed legal, tax, or financial advice. Trump Account rules depend on IRS guidance and forthcoming regulations and may change. We refer to and partner with licensed professionals when personalized advice is needed. Laws change, and we make no warranty of accuracy or timeliness.