Jumpstarting the American Dream
IRS Issues Guidance on 530A (Trump) Accounts
In December 2025, the U.S. Treasury Department and the IRS released guidance (Notice 2025-68) on 530A accounts (also known as "Trump Accounts"), a type of tax-advantaged savings account for children created by the One Big Beautiful Bill Act. This guidance provides more details on how the accounts will work.
Growth period
A 530A account is a traditional individual retirement account (IRA) established for the exclusive benefit of an eligible individual (a child who is a U.S. citizen, has a valid Social Security number, and is under 18) and designated as a "Trump Account" when created. Money may be contributed to a 530A account during the "growth period" and withdrawn after this period ends to use for education, a home purchase, or other purposes. This growth period begins when an account is opened and ends on December 31 of the year before the account beneficiary turns 18. For example, if a child is born in 2025 and turns 18 in 2043, the growth period for the child ends December 31, 2042. During this period, 530A accounts differ from traditional IRAs in several ways, including: (1) there's no earned income requirement to contribute; (2) specific contribution limits and requirements apply; (3) investment options are significantly limited; and (4) distributions are prohibited except in limited cases.
Establishing a 530A account
Parents, guardians, or other authorized representatives may create a 530A account for a child by making an election using IRS Form 4547 or through an online portal (trumpaccounts.gov) expected to launch in mid-2026. Once the election is processed, the Treasury Department or its agent will send instructions to complete an authentication process and activate the account.
Pilot program contribution
A key feature of these accounts is a pilot program contribution by the federal government. For children who are U.S. citizens born between January 1, 2025, and December 31, 2028, with a valid Social Security number, and no prior pilot election, the Treasury Department will deposit a one-time $1,000 contribution for each eligible child. Pilot contributions will not begin before July 4, 2026, and only after the Treasury Department confirms the account has been opened. The $1,000 seed grant is not subject to reduction or offset and is excluded from income.
Other contributions
In addition to the federal seed money, 530A accounts allow for other types of contributions during the growth period, including qualified general contributions from government entities or charitable organizations, employer contributions, qualified rollover contributions from another 530A account, and contributions from parents or relatives. Unlike traditional IRAs, the child does not need earned income to receive contributions. Contributions to these accounts cannot come from SEP IRAs or SIMPLE IRAs.
Account contributions are capped at $5,000 per year and will be indexed for inflation beginning after 2027. An employer may contribute to the 530A account of an employee or the employee's dependent up to $2,500 per year, which counts against the $5,000 limit. Government-funded contributions and pilot program payments are excluded from this annual cap. Contributions must be made within the calendar year to count for that tax year, and no contributions may be made before July 4, 2026.
Account investments
During the growth period, 530A account funds may only be invested in eligible investments, which are domestic mutual funds or exchange-traded funds (ETFs) that track a qualified index (such as the S&P 500), do not use leverage, have annual fees not exceeding 0.1% of the fund's balance, and meet other criteria determined by the Treasury Secretary. Money market funds and cash holdings are not eligible investments, except temporarily while reinvesting contributions or proceeds from sales.
Distributions
Distributions are not permitted until the child turns 18; however, distributions during the growth period may be made for qualified rollovers, qualified ABLE account rollovers (only during the calendar year the child turns 17 and not earlier), refunds of excess contributions, or upon the beneficiary's death. Hardship withdrawals are not allowed.
In the post-growth period, distributions generally follow traditional IRA rules, including a potential 10% early withdrawal penalty if a distribution is made before age 59½and no exception applies. (Exceptions include a first-time home purchase and qualified education expenses.) However, these accounts remain separately tracked for basis and reporting purposes and cannot be aggregated with other IRAs for certain calculations.
During the growth phase, 530A accounts are subject to special reporting rules, including additional disclosures not required by IRAs (such as reporting the source and type of contributions, basis information, and timely reporting of rollovers). Once the child turns 18, standard IRA reporting rules apply.
Individuals interested in establishing a 530A account for their eligible child(ren) may want to consult a tax or financial professional to determine eligibility, contribution limits, and compliance requirements. For more information, visit IRS.gov.
All investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.
Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in such a fund.
Funds are sold by prospectus. Consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional.
The performance of an unmanaged index is not indicative of the performance of any specific security. Individuals cannot invest directly in any index. Past performance is no guarantee of future results. Actual results will vary.
There is no guarantee that working with a financial professional will improve investment results.
The material presented includes information and opinions provided by a party not related to Thrivent. It has been obtained from sources deemed reliable; but no independent verification has been made, nor is its accuracy or completeness guaranteed. The opinions expressed may not necessarily represent those of Thrivent or its affiliates. They are provided solely for information purposes and are not to be construed as solicitations or offers to buy or sell any products, securities or services. Thrivent and its affiliates accept no liability for loss or damage of any kind arising from the use of this information. Concepts presented are intended for educational purposes. This information should not be considered investment advice or a recommendation of any particular security, strategy, or product. The concepts in this presentation are intended for educational purposes only. They may not be suitable for your client’s particular situation. The suitability of any specific product or strategy will be dependent upon your clients’ particular situation.
Hypothetical example is for illustrative purposes. May not be representative of actual results. Past performance is not necessarily indicative of future results.
Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.
Thrivent financial advisors and professionals have general knowledge of the Social Security tenets. For complete details on your situation, contact the Social Security Administration.
Thrivent is the marketing name for Thrivent Financial for Lutherans. Insurance products issued by Thrivent. Not available in all states. Securities and investment advisory services offered through Thrivent Investment Management Inc., a registered investment adviser, member FINRA and SIPC, and a subsidiary of Thrivent. Licensed agent/producer of Thrivent. Registered representative of Thrivent Investment Management, Inc. Thrivent.com/disclosures.
Insurance products, securities and investment advisory services are provided by appropriately appointed and licensed financial advisors and professionals. Only individuals who are financial advisors are credentialed to provide investment advisory services. Visit Thrivent.com or FINRA’s Broker Check for more information about our financial advisors.
A licensed insurance agent/producer may contact you and financial solutions, including insurance may be solicited.
Certified Financial Planner Board of Standards Inc. (CPF Board) owns the CFP®️ certification mark (with plaque design) logo in the United States, which it authorized use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 3172761.4
Prepared by Broadridge Advisor Solutions Copyright 2026.
To opt-out of future emails, please click here.
Trump Accounts provide eligible American children with tax-advantaged investment accounts courtesy of President Donald J. Trump.
