Set the politics aside. Whatever anyone thinks of the name, this is tax law now, it is live, and your clients are already asking. Our job is to be the person in the room who understands it. A Trump Account is a Section 530A account, which is a form of traditional IRA available for children under the age of 18, subject to special rules. The accounts became operational on Saturday, July 4, 2026, and parents or other authorized individuals open one using IRS Form 4547 or the online portal at TrumpAccounts.gov, with a limit of one Trump Account per child. As of July 10, families had collectively contributed almost $125 million since launch. This is not a theoretical planning topic. It is happening at kitchen tables right now, and most of what your clients are reading about it online is incomplete in one specific and expensive way. Congress.gov + 3
Start with the mechanics. Contributions from parents, grandparents, and other individuals can total up to $5,000 per year, with employer contributions of up to $2,500 counted within that cap, and no earned income requirement for the child. Individual contributions are made on an after-tax basis and are not taxable when withdrawn, while employer contributions and employee pre-tax payroll deferrals are excluded from income and therefore taxable later. Contributions from qualifying charitable organizations and state and local governments are not subject to the $5,000 limit. Investments are limited to mutual funds or ETFs tracking the S&P 500 or a similar equity index, with at least 90% in US companies, no leverage, and an expense ratio cap of 0.10%. During the growth period, which runs until December 31 of the year before the child turns 18, funds grow tax-deferred and withdrawals are prohibited. The critical detail for later planning is which dollars create basis: only private out-of-pocket contributions from parents, grandparents, or the child create basis, meaning the government seed money, employer contributions, and state or charitable contributions do not create basis and are fully taxable upon withdrawal. TheStreet + 5
For new parents, the headline is the seed money. Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens can receive a $1,000 government deposit. Existing parents should not tune out, because any child under 18 with a Social Security number may be eligible for a Trump Account, they simply do not get the federal deposit. There is a second bucket of free money worth flagging: up to 25 million children age 10 or younger living in qualifying ZIP codes may receive a $250 charitable deposit from the Michael & Susan Dell Foundation, provided they were born before January 1, 2025. The deadline to enroll is the year before the child turns 18, so a client with a 15 year old still has a window. Set expectations honestly on fit: these accounts are geared toward long-term retirement savings rather than education or shorter-term goals, and a 529 remains the better tool for college. Position the Trump Account as a retirement head start, not a tuition plan. Chase + 4
Now the strategy, and the part where most commentary gets it wrong. The goal is converting the balance to a Roth IRA, and two mechanics govern it. First, you cannot cherry-pick which dollars move, because basis is spread pro rata across the account rather than pulled out first. A child arriving at 18 with $60,000 of family contributions and $40,000 of growth will find 40% of any conversion taxable, whether they convert $10,000 or all of it. Second, converting the after-tax basis costs nothing in tax and is still worth doing, because basis left inside a traditional IRA generates future growth that comes out as ordinary income, subject to the 10% early distribution penalty and eventual RMDs. Moving it to a Roth makes every future dollar of growth tax-free. Helpfully, Notice 2025-68 confirms Trump Accounts are not aggregated with other IRAs for basis allocation purposes, so outside IRA balances do not dilute the math. Here is the trap. The 2026 standard deduction of $16,100 for single filers is what fuels the popular claim that an 18 year old can convert tax-free, but that assumes the young adult is no longer claimed as a dependent. The kiddie tax reaches 18-year-olds whose earned income does not exceed half their support, and full-time students ages 19 through 23 under the same support test, taxing unearned income above $2,700 at the parents’ marginal rate, and a Roth conversion generates exactly that kind of income. The AICPA’s Cary Sinnett calls this the largest technical risk to executing the strategy. For a high-earning household, converting during college could mean paying at 32% or 37% instead of the 10% or 12% the strategy targets, and the safer window opens once the child is out of school and off the parents’ return, closer to age 25. Also note that each conversion starts its own five-year clock. The right answer is almost never age 18, and it always runs through the client’s CPA. Boldin + 7
The compounding is what makes the conversation worth having. Even the seed money alone matters: the $1,000 Treasury deposit invested in a low-cost U.S. equity index fund at an average 7% annual return could grow to roughly $3,380 by age 18 and keep compounding tax-free for decades after conversion. Give clients a realistic expectation rather than the headline numbers. At $250 a month from birth to 18 and a 7% assumed return, the account lands near $108,000 at 18 and roughly $173,000 by 25, and if it is converted in that window and left alone, it approaches $2.6 million of tax-free money by 65. That is the power of an 18 year head start, and it is also where your opening sits. A parent who is thinking hard enough about their child’s future to open a Trump Account has already told you they care about long-term outcomes, and in the same breath they have exposed the gap. No balance in that account replaces the income a family loses if a parent dies, compounding looses the magic if the contributions stop. Run the needs analysis, quote them in Quote&Apply while the motivation is fresh, and let the Trump Account be the door opener rather than the destination.