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If a letter from Treasury showed up in your mailbox in early October congratulating you on a new addition to the family, you are one of about 44 million households that received one. As of October 1, every U.S. child under 18 with a Social Security number has a Trump Account in their name, whether a parent signed them up.
That changes much of what we wrote in July , when opening an account meant finding a form and filling it out. One thing stays the same: the account is an empty shell until you claim it, and you still have to request the $1,000 yourself.
What Changed on October 1
Treasury switched the program from opt-in to opt-out. Under temporary regulations published September 30, the IRS created an "auto account" for every eligible child who didn't already have one. That adds more than 60 million new accounts to the 7 to 8 million that families had opened on their own.
Sign-ups were slow. As of late July, fewer than 10% of eligible children in most states had an account, and the numbers were lowest in lower-income households. Treasury figured an opt-in program would stall at around half of eligible families, while auto-enrollment reaches nearly all of them.
The same regulations made two other changes. Companies and foundations can now give to every child in a region or birth year without waiting for parents to sign up. Donated individual stock can also be held in these accounts, which until now were limited to index funds. Both get their own section below.
Reading the Letter
Being enrolled does not mean the account has money in it. The account Treasury created is a real IRA in your child's name, but Treasury controls it for now, and it can accept only two kinds of money:
- Group gifts from charities, foundations, and governments (the Dell and Micron programs, for example)
- The $1,000 federal deposit, only if someone has requested it
It cannot accept your money, a grandparent's money, or an employer contribution. None of that can go in until you claim the account and move it into one you control.
The letter says the account is "invested in the U.S. stock market through a low-cost index fund." That holds for cash. The next sentence adds a detail: "Some charitable contributions may be received and held by the account as stock." In practice, a donor can put shares of a single company into your child's account, and those shares stay put for up to five years before they're sold and moved into the index fund. You don't get a say in which company. More on that below.
The letter also doesn't say what happens if you ignore it. The account will just sit there and collect any group gifts your child qualifies for, and when your child turns 18 they can claim it themselves and roll it into a regular IRA.
The $1,000 Is Still Opt-In
We expect this to trip up many families. Treasury can open the account on its own, but by law it cannot request the $1,000 on its own. A parent, or whoever will claim the child as a dependent, has to make a separate pilot program election.
The requirements haven't changed:
- Born January 1, 2025 through December 31, 2028
- U.S. citizen with a Social Security number issued before you make the election
- Expected to be your qualifying child for the year you elect
- No one else has already claimed it for this child
- The parent making the election (and a spouse on a joint return) also has a work-eligible Social Security number
You can make the election at any time during the year in the Trump Accounts app, through your IRS Online Account under Forms, or on paper Form 4547 (Part III, line 7). It isn't a refund, and it doesn't happen automatically when you file your return.
If you requested the $1,000 earlier this year but never finished activating the account, the deposit will now land in the auto account. Claim the account and the money comes with it.
How to Claim the Account
Download the Trump Accounts app from TrumpAccounts.gov, the App Store, or Google Play. We went through it ourselves in early October. The app won't show you anything until Form 4547 is on file, so if you never filed one, it walks you through the form before you can go further. That form is also where the $1,000 election gets made, so answer that question while you're in it. After you submit, the app tells you to expect one to three business days of processing, and nothing is left to do but wait.
Once that's done, the balance moves from the auto account into one you manage. From there you can add money and choose among the eligible funds, or move the account to another custodian later. The whole process takes less effort than opening a 529, though it takes two sittings instead of one.
The claim process is stricter than the old sign-up form. The person claiming has to show legal authority over the child's finances and the right to see the child's tax information. That requirement is meant to keep strangers out.
If you get a text or email with a link to "claim your Trump Account," it's a scam. The only legitimate routes are the official app, TrumpAccounts.gov, your IRS Online Account, and the Treasury call center at 866-872-4547.
Who Else Is Putting Money In
Large donors are a big part of why Treasury switched to auto-enrollment. A foundation that wants to give every child in a state $250 doesn't want half of them left out because a parent never filled out a form. Under the new rules, the gift reaches every child, whether or not the account has been claimed.
What's already announced:
- Michael & Susan Dell Foundation: $6.25 billion, $250 per child, for children born 2016 through 2024 who live in ZIP codes where median household income is under $150,000.
- Micron: $250 million. A $250 seed deposit for children in counties where it operates (the Boise area, five Central New York counties, and sites in Virginia, California, Colorado, Minnesota, and Texas), plus a $1,000 match for employees' children.
- Employers: More than 50 companies, including JPMorgan, BlackRock, Nvidia, and Goldman Sachs, have committed $1,000 or more for employees' kids. Employer money can go in tax-free up to $2,500 a year per employee, but it counts toward the $5,000 annual cap and requires a claimed account.
Expect more deals like Micron's. A company building a fab or a data center in your county now has an inexpensive and highly visible way to put money in the hands of every family nearby. For that gift to sit outside the $5,000 cap, it has to run through a charity or a government and go to an entire class, such as every child in a state or a birth year, or a Treasury-approved group of at least 5,000 children. A company that writes checks to individual kids directly uses up the family's own contribution room.
Donated Stock
Until the regulations published September 30, these accounts could hold only diversified, low-cost U.S. index funds. The new rules add an exception: a donor can now give publicly traded stock of a U.S. company directly into the accounts of a whole group of children. Treasury's argument is that the index-fund rule restricts what the account can buy with its own money, and donated shares weren't bought. We'll see whether that reading holds up.
On your child's side, donated shares have to be held for five years, or until the year your child turns 18 if that comes first. Then the trustee sells them and puts the proceeds in the index fund. During that time, your child owns a piece of one company inside an account that was built to avoid exactly that kind of concentration. If the stock drops, you can't do anything about it: you can't sell early, and you won't be voting the shares. The regulations are silent on whether a parent can decline a stock gift. We read that as no, but that is a guess until Treasury says otherwise.
On the donor's side, there's less new here than the headlines suggest. Giving appreciated stock to charity has always come with two benefits: no capital gains tax on the appreciation, and a deduction for the full market value. A donor-advised fund already does both. What Trump Accounts add is the five-year lockup. A founder who gives a big block of their own company's stock knows it won't hit the market for five years, and even then only in an "orderly" sale, which is valuable if you hold a concentrated position.
The gift has to go through a 501(c)(3) or a government rather than straight from the donor, and the normal limits on deducting appreciated stock still apply. The regulations specifically allow donor-advised funds and private foundations to serve as the channel. If you hold a low-basis stock position and care about a specific community, this is now a legitimate tool.
Should You Add Your Own Money?
Our view hasn't changed. Take every dollar of free money first: the $1,000, plus any employer match or group gift your child qualifies for. It costs you nothing and compounds for 18 years.
After that, most families should fund a 529 for education, then a Roth IRA once the child has earned income, and the Trump Account last. The difference comes down to how the money is taxed on the way out. A 529 grows tax-free for school and a Roth grows tax-free for anything. A Trump Account's growth is taxed as ordinary income when it's withdrawn, and if your child pulls money at 18 while still your dependent, some of it can be taxed at your rate under the kiddie tax. Withdrawals before 59½ usually carry a 10% penalty on top. The college and first-home exceptions waive the penalty only; the tax still applies.
The July post walks through the tax mechanics. In short, this account suits money other people give your child, and it ranks below a 529 or a Roth for money you would otherwise invest yourself.
Where This Leaves You
If you got the letter, do these in order:
- If your child was born in 2025 through 2028, request the $1,000. It is a separate step and it will not happen on its own.
- Claim the account in the app.
- Decide what, if anything, to add. Free money first, 529 and Roth next, your own cash here last.
If you want help deciding where the account fits in your family's plan, including what to do when your child turns 18, talk to your CPA at Dark Horse CPAs.
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