How to Open a Trump Account in 2026: What Parents Need to Know Before Filing IRS Form 4547
A new federal savings program for children is quietly entering the tax system — and parents who miss the fine print this filing season could permanently lose out on government money meant for their kids.
With the release of IRS Form 4547, families can now elect to open a Trump Account for an eligible child while filing a 2025 tax return. Although these accounts won’t accept contributions until mid-2026, the election itself happens now — and it is not automatic.
Here’s what parents need to understand, what’s easy to miss, and why this decision deserves more attention than a routine tax checkbox.
This Is an Election — Not an Automatic Benefit
Trump Accounts are opt-in. Nothing happens unless a taxpayer affirmatively elects to open one.
Form 4547 serves two separate purposes. First, it allows an authorized individual to elect to open an initial Trump Account for a qualifying child. Second — and more importantly — it provides a separate election to request the $1,000 federal pilot contribution, if the child qualifies.
Opening the account alone does not trigger government funding. Taxpayers must actively request the pilot contribution by checking the appropriate box. Miss that step, and Treasury will assume the benefit was declined.
The form allows elections for up to two children per submission. Families with more than two eligible children must file additional forms — a procedural detail that could easily be overlooked and later disputed.
The “Responsible Party” Requirement Is Not Just Administrative
Form 4547 introduces the concept of a “responsible party,” a designated individual who will serve as the primary contact for the account.
This person will receive activation instructions from Treasury, complete identity verification, and act as the administrative point of contact. Until that activation process is completed, the account is not fully operational — even if the election itself has been accepted.
Activation is expected to begin in May 2026, months after tax season ends. Families who move, change emails, or fail to respond could experience delays or complications that are difficult to unwind later.
Timing Matters — and So Does July 4, 2026
One of the most misunderstood aspects of Trump Accounts is timing.
No contributions of any kind — from parents, employers, or the federal government — may be made before July 4, 2026. That includes the $1,000 pilot contribution. Filing Form 4547 now only reserves the account and establishes eligibility; it does not allow early funding.
Parents expecting immediate financial impact should adjust expectations. Those planning ahead should recognize that missing the election window could mean losing an entire year of future contributions and growth.
Who Can Open an Account — and When the Rules Tighten
For families opening a Trump Account without requesting the pilot contribution, the IRS sets a priority order for authorized individuals: legal guardians first, followed by parents, adult siblings, and grandparents.
However, the rules become more restrictive if the taxpayer is requesting the $1,000 federal pilot contribution. In that case, the filer must reasonably expect that the child will be their qualifying child for the applicable tax year.
This is a forward-looking representation. While the IRS allows some flexibility if circumstances change later, taxpayers should be confident in their eligibility before making that election, particularly in shared-custody or support-related situations.
Contribution Limits Aren’t as Simple as They Sound
Trump Accounts have a $5,000 annual contribution limit, adjusted for inflation after 2027. That limit applies to contributions made by parents, family members, and employers. Employer contributions are capped at $2,500 per year and are excluded from taxable income.
However, several contributions fall outside that cap. The $1,000 federal pilot contribution, certain government or charitable contributions, and specific rollovers do not reduce the $5,000 annual limit.
Not all contributions are treated the same for tax purposes, either. Family contributions made with after-tax dollars create basis in the account, while employer and government contributions do not. That distinction will matter later.
Withdrawals Are Heavily Restricted Until Age 18
Trump Accounts are designed as long-term savings vehicles, not flexible emergency funds.
Distributions are generally prohibited while the beneficiary is under 18, with only narrow exceptions such as correcting excess contributions, rolling funds into another Trump Account, or distributing the account upon the beneficiary’s death. Hardship withdrawals are not permitted, and accounts cannot simply be closed due to changing circumstances.
Once the beneficiary turns 18, most restrictions fall away, and distributions are treated similarly to those from a traditional IRA — meaning withdrawals may be partially taxable and partially tax-free, depending on basis.
Recordkeeping Will Matter More Than Many Parents Expect
Because some contributions create basis and others do not, families will need to track where money came from — potentially over nearly two decades and across multiple contributors.
Without careful recordkeeping, beneficiaries risk paying tax twice on after-tax contributions when distributions begin. This is especially relevant for accounts funded by parents, grandparents, employers, and government sources over time.
Investment Options Are Intentionally Narrow
Trump Accounts are subject to strict investment rules. Eligible investments must track U.S. stock indexes, carry no leverage, and maintain annual fees capped at 0.1%.
Cash and money market holdings are generally prohibited, except in limited situations. Trustees are required to monitor compliance, and corrective action must be taken if an investment becomes ineligible — including if fees rise above the allowed threshold.
Before You File Form 4547
Before submitting Form 4547 with a 2025 tax return, taxpayers should be able to confirm all of the following:
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The child will be under age 18 at the end of the election year and has a valid Social Security number
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You qualify as an authorized individual for the child’s Trump Account
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If requesting the $1,000 pilot contribution, you reasonably expect the child to be your qualifying child for the applicable tax year
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You understand that no contributions of any kind can be made before July 4, 2026
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You are prepared to complete the Treasury Department’s account activation and identity verification process in 2026
What About the Private Seed Money?
Separate from the federal pilot program, Michael and Susan Dell have pledged $6.25 billion to seed Trump Accounts with $250 each for children under age 10 who were born before 2025 and live in ZIP codes with median household incomes below $150,000.
At this stage, that funding mechanism does not appear in Form 4547 or current IRS guidance. Families interested in potential eligibility may still need to open accounts now and wait for separate instructions later.
The Bottom Line for Parents Filing in 2026
Trump Accounts are not automatic benefits, and they are not forgiving of inattention.
Parents who fail to file Form 4547, miss the pilot contribution election, or misunderstand activation requirements may permanently forfeit benefits intended for their children. As final rules continue to emerge from the Internal Revenue Service and the U.S. Department of the Treasury, taxpayers should treat this election with the same care as any major financial or tax decision.
