Trump accounts get supercharged by employer matches
Soon, parents and guardians can open a Trump account for their children — and a number of large employers are piling on the incentives to get set up.
For starters, babies born in 2025 through 2028 may receive a one-time $1,000 contribution from the Department of the Treasury. There are no income requirements, and all U.S. families are eligible for the initial seed money. But, in some cases, that is just the half of it.
To help fund these savings accounts from the outset, a growing list of companies, including SoFi, Charter Communications, BNY, BlackRock, Investment Company Institute, Robinhood and Charles Schwab, announced they will match the federal $1,000 contribution for employees’ children.
While the goal is to kick-start wealth-building opportunities, experts say employer matches, particularly from firms in the financial services industry, may not help reduce the U.S. racial wealth gap.
“Those are higher income earners, so it’s not clear to me how likely that is to help wealth building writ large,” said Madeline Brown, senior policy associate at the Urban Institute, a Washington-based think tank.
Other funds may also be available, depending on certain criteria. Children 10 or under and born before Jan. 1, 2025, — who wouldn’t qualify for the $1,000 initial deposit from the Treasury — could get a $250 contribution thanks to a $6.25 billion pledge made by tech CEO Michael Dell and his wife, Susan.
Children in Connecticut may qualify for an additional donation from billionaire hedge fund manager Ray Dalio and his wife, Barbara. Philanthropists in other states could follow suit as part of a “50-state challenge,” Treasury Secretary Scott Bessent said at a White House press conference last month.
As it stands, those additional donations are geared toward families who live in a ZIP code where the median income is less than $150,000.
How to set up a Trump account
Trump accounts, also known as Section 530A accounts, were created to encourage early wealth building as part of President Donald Trump‘s “big beautiful bill,” which Congress passed in July.
To open the account, an election must be made on IRS Form 4547, named for Trump’s presidential terms. The form also includes a check box for the $1,000 Treasury contribution for children born between 2025 and 2028.
Form 4547 can be filed separately or with your 2025 tax return as soon as Jan. 26, which marks the official start of the 2026 tax filing season.
Later in the year, this election can also be made via Trumpaccounts.gov.
Once an account is established, parents, guardians, grandparents and others can contribute up to $5,000 a year in after-tax dollars up until the year before the beneficiary turns 18. The annual contribution limit adjusts for inflation after 2027.
As part of the $5,000 limit, employers can contribute up to $2,500 per worker per year, which won’t count as taxable income, according to the IRS. This figure also adjusts for inflation after 2027.
Qualifying charitable organizations and state and local governments can also make contributions that do not count toward the $5,000 limit.
How much a Trump account may be worth
Experts say the additional Trump account contributions could make a difference over time.
For example, let’s say a family receives $1,000 from the Treasury and a $1,000 matching contribution from their employer for a total of $2,000 during their baby’s first year.
That account could be worth about $6,800 after 18 years, assuming 7% annual returns, according to certified financial planner Ivory Johnson, founder of Delancey Wealth Management in Washington. He is also a member of CNBC’s Financial Advisor Council.
Many experts encourage families to accept “free money” from the Treasury, an employer or other sources. But beyond that, families can also weigh other investing options, such as 529 college savings plans and taxable brokerage accounts, among others, depending on their goals and timeline.
