Trump Account calculator,
the real IRC §530A numbers.

Field guide

What a Trump Account actually is.

Trump Accounts (formally, IRC §530A) were created by the One Big Beautiful Bill Act (OBBBA), signed July 2025. Every US-citizen child born 2025–2028 with a valid Social Security number is eligible for a one-time $1,000.00 federal seed deposit, on top of which family, employers, and others can contribute up to $5,000.00/year combined. Contributions begin July 4, 2026.

Opening an account

Starting July 4, 2026, an account is opened by filing IRS Form 4547 through trumpaccounts.gov. From July 3, 2026, it can also be opened directly through hospital birth registration for a newborn — the account must exist for the child to receive the $1,000.00 seed.

Where the money sits

Unlike a 529 or a brokerage account, the investment choice isn't up to the account holder. Funds are statutorily required to sit in low-cost US stock index funds until the beneficiary turns 18 — there's no menu of funds to pick between, and no ability to shift to bonds or cash as the child approaches 18 the way a typical age-based 529 glide path would.

Employer contributions: pre-tax, but not additive

Employers can contribute up to $2,500.00/year through a Section 128 employer contribution program — a new, separate written plan OBBBA created specifically for Trump Accounts, distinct from the pre-existing Section 125 cafeteria plan — excludable from the employee's taxable income. The detail worth getting right: this counts toward, not on top of, the $5,000.00 combined family cap. A family assuming they can add the full $5,000.00 themselves on top of a maxed-out employer contribution would be over-contributing without realizing it — this calculator's warning banner exists specifically for that scenario.

What actually happens at 18

On January 1 of the year the beneficiary turns 18, the account converts to a traditional IRA and standard IRA withdrawal rules apply, including the 10% early-withdrawal penalty before 59½. The part that catches people off guard: only the family's own after-tax contributions come back out tax-free. The federal seed money and any employer contributions were never taxed going in, so they — along with every dollar of investment growth, including growth on the family's own contributions — are taxed as ordinary income on withdrawal. Standard IRA exceptions to the 10% penalty apply: qualified education, a first-time home purchase (up to $10,000), a birth or adoption (up to $5,000), medical expenses, disability, and terminal illness — but the ordinary income tax on the taxable portion still applies even when an exception waives the penalty.

A concrete illustration: if a family contributes $4,000 total and the federal seed adds $1,000, and the account grows to $40,000 by 18, only the $4,000 the family actually put in comes back tax-free — the other $36,000 (90% of the balance) is taxable, because it's either government/employer money or growth, neither of which creates basis.

Trump Account vs. 529: complementary, not competing

A 529 plan has a much higher effective ceiling (5-year superfunding allows $95,000+ in one year) and covers a genuinely broad, growing list of education-related expenses tax-free. A Trump Account is capped far lower but isn't restricted to education spending at all once it converts to a regular IRA at 18 — it's simply subject to ordinary IRA rules from that point on. Many families will find funding both worthwhile: the 529 for education-specific costs, the Trump Account as a smaller, more flexible supplementary nest egg.

Disclaimer

This calculator is a planning tool, not tax or financial advice, for a program that only recently launched. IRS guidance continues to develop; verify current rules with the IRS or a tax professional before making contribution decisions.