With the launching of Trump Accounts–a new, tax-deferred investing option for children geared toward retirement and intended to build long-term wealth–earlier this year, the U.S. Department of Treasury has now begun auto-enrolling children as of October 1, according to temporary regulations published last week. The accounts themselves, known as 530A Accounts, were established under President Trump’s One Big, Beautiful Bill package, which, uncharacteristic of previous Republican pushed legislation, contained a significant amount of increased spending and investing programs.
The process could increase the number of children enrolled in Trump Accounts by more than 60 million for this calendar year. In future years, the regulations could boost enrollment by about two million accounts per year.
“Trump Accounts level the playing field by allowing every parent to invest in their children’s future, not just wealthy families with trust funds,” said a Treasury Department spokeswoman in July.
The accounts function like an IRA, with some exceptions. Trump Accounts can receive contributions from multiple sources, such as family or employers, and the funds grow tax deferred.
They are available to all children under the age of 18, providing the child is a U.S. citizen and has a valid Social Security number. An authorized adult—including a parent, legal guardian, grandparent or sibling—can open an account on a qualifying child’s behalf.
Children born from 2025 through 2028 can receive a one-time $1,000 deposit from the U.S. Treasury Department as part of a pilot program designed to incentivize long-term savings.
Dell CEO Michael Bell and his wife Susan committed $6.25 billion to provide an additional $250 for children born between 2016 and 2024 who live within zip codes where the median income is $150,000 or less.
Parents, guardians and grandparents can collectively contribute up to $5,000 per child per year in after-tax dollars up until the year before the beneficiary turns 18.
The annual contribution indexes for inflation after 2027.
Thus far, 7 to 8 million American children have been signed up for Trump Accounts and Treasury Secretary Scott Bessent expects that number to increase significantly.
“We anticipate within a month we will have 70 million because we will go to auto enroll,” said Bessent at a recent hearing of the House Financial Services Committee.
But since signing up for Trump Accounts requires families to opt-in by filing a separate form with their tax return, overall participation rates, especially among low-income families has been low.
The Social Security Administration said it would introduce a process to enroll newborns at the hospital upon the family’s request for a Social Security number during the birth registration process.
Only 5% of low-to-moderate income families—those earning up to $80,000 annually—have opened a Trump Account, according to recent data. While auto enrollment could help lower income families, it will depend on how it is enacted, since lower income filers often face barriers to certain tax breaks and government programs.
“There are so many different ways to sign up for Trump Accounts,” said Omeed Firouzi, director of the low-income taxpayer clinic at Temple University’s Beasley School of Law.
“Depending how it’s enacted, it could be a positive for lower income folks,” said Firouzi.
And with recent cuts to IRS funding, there is concern whether the agency can do this effectively.
In July, it was announced by The Treasury that the IRS chief executive and Social Security Administration’s commissioner would lead the Agency’s Trump Account expansion.
Last week’s auto-enrollment announcement follows a new IRS hire dedicated to the program, as Joseph Velli, a former Bank of New York and Convergex Group executive will serve as a senior advisor to SSA Commissioner Frank Bisignano, in the agency’s Trump Account expansion.
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