On July 4, 2026, money started flowing into a new kind of account for children: the Trump Account. Created by the One Big Beautiful Bill Act (OBBBA, signed July 4, 2025, and also called the Working Families Tax Cuts by the IRS), it includes a $1,000 federal “pilot program” contribution for U.S.-citizen children born from 2025 through 2028.
The program matters to families raising children in the U.S., and also to families in Japan whose children are U.S. citizens, including dual U.S.-Japan nationals. This article walks through what the IRS and the Treasury Department have published: who can have an account, who gets the $1,000, contribution limits and start dates, the election form, the SSN requirement, investment rules, and tax treatment. Where a detail has not been published, we say so.
For an election made in 2026, the child must have been born after December 31, 2008. The $1,000 pilot contribution is limited to U.S.-citizen children born in 2025 through 2028.
Key points
- A Trump Account is a type of traditional IRA opened for a child. The child must be under 18 at the end of the year of the election and must have an SSN issued before the election.
- U.S.-citizen children with an SSN who were born January 1, 2025, through December 31, 2028, can be enrolled for the $1,000 pilot contribution, which is not deposited before July 4, 2026.
- Contributions from family and others have been allowed since July 4, 2026, up to $5,000 a year, including employer contributions of up to $2,500. The limits are indexed after 2027.
- The election is made on Form 4547, filed with your tax return or through your IRS Individual Online Account.
- Money generally stays in the account until January 1 of the year the child turns 18, and it can be invested only in low-cost funds that track a U.S. stock index. IRS and Treasury materials do not address how Japan taxes these accounts.
What a Trump Account is
According to the Instructions for Form 4547, a Trump Account is a type of traditional IRA set up by an authorized individual for the exclusive benefit of a child, and the child owns it. Every Trump Account must have a trustee, which must be a bank or another entity approved by the IRS.
Until December 31 of the year before the child turns 18, the account is in its “growth period,” and special rules apply. A child born October 1, 2025, turns 18 on October 1, 2043, so the growth period ends December 31, 2042. During the growth period:
- The account can hold only “eligible investments.”
- It has its own contribution limit, separate from other IRAs.
- No IRA deduction (section 219) is allowed for contributions.
- Distributions are generally restricted.
After the growth period, most of these special rules fall away, and the account is generally treated like any other traditional IRA.
Which children qualify, and who can make the election
| Item | Opening an account only | Also electing the $1,000 pilot contribution |
|---|---|---|
| Child’s age or birth date | Under 18 at the end of the election year (born after December 31, 2008, for a 2026 election) | Born January 1, 2025, through December 31, 2028 |
| Citizenship | Not listed as a requirement by the IRS | Must be a U.S. citizen |
| SSN | A valid SSN issued before the election | Same |
| Who elects | Legal guardian, parent, adult sibling, or grandparent, in that order of priority | A person who expects the child to be his or her qualifying child for the year |
| Other | No earlier Trump Account election for the child | No earlier pilot election processed for the child |
A valid SSN is one that is valid for employment and issued by the Social Security Administration before the election. An SSN issued to a child who was a U.S. citizen at the time is valid for employment.
“Qualifying child” for the pilot contribution uses the definition in Internal Revenue Code section 152(c). Under IRS Publication 501, the main tests are relationship (your child, sibling, or a descendant of either), age (generally under 19 at year-end and younger than you), residency (lived with you for more than half the year), support (the child did not provide more than half of his or her own support), and no joint return by the child.
Improper pilot elections are subject to penalties under section 6659 (IRS Notice 2025-68).
The $1,000 pilot program contribution
- Amount: a one-time $1,000 per child, deposited by the Treasury.
- Who: U.S.-citizen children with an SSN born in 2025 through 2028.
- When: as soon as practicable after the election is processed and the trustee confirms the account is open, but not before July 4, 2026.
- It does not count toward the $5,000 annual limit.
The Treasury announced that eligible children would begin receiving the $1,000 deposit on July 4, 2026. The IRS reported that, as of March 31, 2026, Forms 4547 had been filed for more than 4 million children, more than 1 million of them with the $1,000 election.
Contribution rules (from July 4, 2026)
| Type of contribution | Annual limit | Creates basis? |
|---|---|---|
| Pilot contribution ($1,000) | Not subject to the limit | No |
| Qualified general contributions from governments or 501(c)(3) charities | Not subject to the limit | No |
| Employer contributions (section 128) | $2,500, counted within the $5,000 | No |
| Contributions from parents, grandparents, the child, or anyone else | $5,000 together with employer contributions | Yes |
| Rollover from another Trump Account | Not subject to the limit | Carries over the old account’s basis |
None of these contributions is taxable to the child when made. The $5,000 and $2,500 limits are indexed for inflation after 2027. Unlike a regular IRA, the child does not need earned income, but contributors get no deduction.
Employer contributions are made under an employer’s Trump Account contribution program to the account of an employee or an employee’s dependent, and they are excluded from the employee’s income. In July 2026 the Treasury said more than 50 companies had committed to contribute for their employees’ children.
A contribution from a relative or friend may be a gift. In June 2026 the IRS and Treasury issued Revenue Procedure 2026-25, a safe harbor under which certain contributions by individual donors are not subject to gift tax reporting for that year if its requirements are met. Check the revenue procedure for the details.
Investment and withdrawal rules
During the growth period, the account may hold only eligible investments. Under Notice 2025-68 and proposed regulations released in August 2026, that generally means a mutual fund or ETF that tracks an index of primarily U.S. companies, such as the S&P 500, does not use leverage, and charges annual fees and expenses of no more than 0.1% of the balance. If no investment is selected, the trustee invests the money in an eligible investment it chooses. Comments on the proposed regulations are due October 20, 2026, and final regulations have not been issued.
During the growth period, the only permitted distributions are rollovers to another Trump Account, a rollover to an ABLE account (a savings account for people with disabilities) at age 17, distributions of excess contributions, and distributions on the child’s death. Starting January 1 of the year the child turns 18, traditional IRA rules generally apply, including the possible 10% additional tax on distributions before age 59½ unless an exception applies, such as higher education expenses or a first home purchase.
Tax treatment follows the traditional IRA model. The IRS describes the investments as growing tax-deferred, with tax due when money is withdrawn. Basis created by contributions from parents and others is the portion that is not taxed again on withdrawal.
How to elect (Form 4547) and open the account
- Get the child an SSN. A U.S.-citizen child born in Japan applies with SSA Form SS-5-FS; proof of citizenship can be a U.S. passport or a Consular Report of Birth.
- File Form 4547. The IRS says the fastest way is to include it with your e-filed return (Form 1040 or 1040-NR). You can also submit it through your IRS Individual Online Account, signing in with ID.me. Paper forms go to the address listed at IRS.gov/PaperReturns.
- Activate the account using the instructions from the Treasury or its agent. The Treasury says the first activation emails come only from no-reply@TrumpAccounts.Treasury.gov.
- Use the official Trump Accounts app or TrumpAccounts.gov to fund the account and choose investments.
Do not attach Form 4547 to Form 1040-X, and do not amend a Form 1040, 1040-SR, or 1040-NR just to attach it. The Treasury says there is no cost to open an account.
Watch for scams. The Treasury says it and its service providers will never ask for passwords, one-time codes, or other credentials by email, text, or phone. If in doubt, use the official app, TrumpAccounts.gov, or the Trump Account call center at 1-866-USA-4547, and do not use phone numbers found through internet searches.
What families in Japan should check
- Citizenship and SSN: only U.S.-citizen children qualify for the $1,000. Citizenship is not listed as a requirement just to open an account, but an SSN is required either way. For a child born in Japan, apply with Form SS-5-FS through a Social Security office or the Federal Benefits Unit that serves you (listed on the SSA website).
- Parents without an SSN: the Form 4547 instructions say a nonresident or resident alien who does not have and is not eligible for an SSN enters an ITIN. A Japanese-national parent making the election may need an ITIN.
- Addresses: Form 4547 has fields for foreign addresses for both the parent and the child. We could not confirm in IRS or Treasury materials, as of October 2026, how fully account activation and the official app work with a Japanese address or phone number.
- Qualifying child: the person electing the $1,000 must expect the child to be his or her qualifying child for the year. Whether a parent living with the child in Japan meets the tests is checked against Publication 501 (relationship, age, residency, support, and so on). We have not found guidance written specifically for families abroad.
- Japanese tax: a Trump Account is a U.S. IRA, and IRS and Treasury materials do not address how Japan taxes it, including annual earnings, future withdrawals, or contributions from relatives under Japan’s gift tax. Families living in Japan should also check with a Japanese tax professional.
- U.S. filing: a U.S.-citizen child can have U.S. filing obligations even while living in Japan. See the related article.
Example: using the annual limit
Example (hypothetical): a U.S.-citizen child with an SSN, born in March 2026. A parent elects the pilot contribution on Form 4547, and $1,000 is deposited in September 2026. Afterward, the parent’s employer contributes $2,000 a year and a grandparent contributes $3,000 a year.
| Item | Amount | Limit check |
|---|---|---|
| Pilot contribution | $1,000 (once) | Not subject to the limit |
| Employer contribution | $2,000 per year | Within $2,500 |
| Grandparent contribution | $3,000 per year | Within $5,000 together with the employer amount |
| Total counted toward the limit | $5,000 per year | Exactly at the limit |
Any additional contribution from the parent in the same year would exceed the $5,000 limit. Only the grandparent’s $3,000 a year creates basis, the part not taxed again on withdrawal. The $1,000, the employer money, and all investment growth will be taxable when withdrawn.
FAQ
Can a child who is not a U.S. citizen have an account?
The IRS lists an SSN, not citizenship, as the requirement for opening an account. The $1,000 pilot contribution, however, is only for U.S.-citizen children.
Can a child born in 2024 get the $1,000?
No. The pilot covers children born January 1, 2025, through December 31, 2028. A child born in 2024 can still have an account opened while under 18 at the end of the election year.
Can parents deduct their contributions?
No. Section 219 IRA deductions are not allowed for Trump Account contributions.
When do I have to make the election?
Form 4547 can be filed at any time, including with your tax return. The election to open an account must be made before the calendar year in which the child turns 18.
What happens when the child turns 18?
The growth period ends on January 1 of the year the child turns 18, and the account generally follows traditional IRA rules, including tax on withdrawals and the 10% additional tax before age 59½ unless an exception applies.
At CLT NY INC., an IRS Enrolled Agent can help families with U.S.-citizen children with their tax returns, Form 4547, and U.S. filing obligations for citizens living in Japan, in English or Japanese. Contact us.
Related articles
- Children Born in the U.S. Are U.S. Citizens: Filing Obligations That Follow Them to Japan and the Accidental American Problem
- Mastering Tax Savings for Families: A Comprehensive Guide to the Child Tax Credit (CTC): Eligibility, Amounts, and Application
- US Tax Deep Dive: Understanding Dependent Exemptions, Child Tax Credit (CTC), and the Impact of SSN vs. ITIN for Children
- Navigating US Tax Obligations for Gifts from Japanese Parents: Form 3520 Reporting and Severe Penalties Explained
- Are NISA and iDeCo Taxable in the U.S.? The Crucial Differences in Tax-Advantaged Investment Accounts Between Japan and the U.S.
Sources: IRS, Trump Accounts; Instructions for Form 4547 (12/2025); About Form 4547; IRS Notice 2025-68; IR-2025-117; IR-2026-42; IR-2026-80 (Rev. Proc. 2026-25); IR-2026-96 (proposed regulations on eligible investments); IRS Publication 501 (2025); U.S. Treasury press release (May 28, 2026); U.S. Treasury press release (July 4, 2026); SSA Form SS-5-FS. Information as of October 2026. This article provides general information and is not individual tax advice.
TAX PREPARER SWITCH CAMPAIGN
Switch your tax preparer and get 50% off your U.S. tax return this year.
Show us last year's invoice and we take 50% off the fee (up to $500, first year only). Prepared and signed by an IRS Enrolled Agent, in English or Japanese.
See the switch campaign →First time using a tax preparer? See our individual tax return service →