On December 2, the Treasury Department and the Internal Revenue Service (IRS) released initial guidance, Notice 2025-68, on new child savings accounts (Trump accounts, also called 530A accounts).

The guidance begins by stating it is an announcement of the agencies’ intent to issue regulations governing the new accounts. The Notice continues by summarizing the details (they are complex) of the new accounts. It then moves on to focus on certain initial questions that need answering. Among those questions is guidance on the need to sign up for accounts eligible for a government contribution of $1,000 for U.S. citizens born between 2025 and 2028 (plus, for certain lower and middle income beneficiaries, an additional $250 from a $6.2 billion contribution from billionaires Michael and Susan Dell). The Notice closes with a request for comments on what the coming regulations should address (and how).

Generally, Trump accounts are tax-favored savings programs built on a combination of Roth and traditional IRA rules. They are designed for children under the age of 18 (after a child reaches age 18, traditional IRA rules kick in). Individuals can contribute, after tax, up to $5,000 annually (employers can contribute up to $2,500 annually) to a Trump account. Earnings are tax-free, but post-age-18 distributions are taxable as ordinary income (not capital gains). Post-age-18 distributions are also subject to IRA-like early withdrawal penalties. No distributions (subject to certain exceptions, like, for example, the death of the child) are permitted prior to the child/beneficiary reaching age 18.

The new Trump account rules also include a pilot program, in effect from January 1, 2025 to December 31, 2028. U.S. citizens born between those dates are eligible for a $1,000 government-paid contribution, if their parents opt in to participate in the program. Notice 2025-68 will use a new Form 4547 for the opt-in process. The form can be filed along with the parent’s taxes. The $1,000 government contribution will not count towards the annual $5,000 contribution limit. An additional $250 contribution, paid from a $6.2 billion donation from billionaires Michael and Susan Dell, may also be available for children ages 10 and under who were born before the cutoff for the Treasury’s funding and live in certain zip codes where the median incomes are below $150,000.

Trump account funds’ investment choices are limited, generally to low-cost non-leveraged mutual funds or exchange traded funds (ETFs) that track qualified indexes. There are myriad questions about these investment limitations, which Notice 2025-68 lists, and requests comments on.

Treasury’s request for comments on Notice 2025-68 includes the following questions:

• Whether guidance is necessary for selecting a new party responsible for the Trump account (e., in the case of a change in custody or guardianship)
• The definitions of mutual fund and ETF
• The appropriate treatment of fees charged for transactions, such as sales charges or loads or redemption fees
• The determination of whether a mutual fund or ETF meets the 0.1 percent threshold
• Situations in which it would not be inappropriate for funds to remain uninvested for a de minimis amount of time
• Potential safe harbor procedures regarding what would be reasonable ongoing evaluation procedures, including the frequency of the evaluations
• The issue of handling ineligible investments
• The applicability of withholding under section 3405 for distributions from a Trump account during the growth period (other than distributions that are qualified rollover contributions)
• Trump account requirements for disclosures to beneficiaries
• The format for the trustee’s electronic reporting of a qualified rollover contribution
• Other uniform factors and criteria that should be considered to designate qualified geographic areas for qualified general contributions

Notice 2025-68 also notes that more guidance may be coming soon. It says, “Proposed regulations regarding the election to open an initial Trump account and the election for the pilot program contribution under Sec. 6434 may be issued prior to the end of the comment period for this notice.”

The White House has established a general information website, trumpaccounts.gov, for people who want more information on these new tax-favored savings accounts.

Prospects: There is both excitement and trepidation in the financial services world about these new accounts. Interest is high, but there is concern about whether the government will restrict the number of financial institutions that can hold Trump accounts, and the kinds of investments that account funds can make, which are restricted by the statute. Currently, many banks, brokers and investment managers have expressed interest in participating in the program, viewing it as an opportunity for new, long-term business. So far, there has been no announcement of program trustee(s) other than that the initial trustee(s) is/are to be selected by Treasury, regardless of the source of the contributions. However, individuals will be able to roll over their account to another provider through a direct trustee-to-trustee transfer. Any current IRA trustee will be eligible to offer the accounts if they satisfy account administration and reporting requirements.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org