When does my kid get the free 'Trump account' money?

Andrew Keshner

As the accounts start working, here are 5 things families should know about what's next

"Trump accounts" for kids launch on July 4. Here's what happens next.

Over 6 million children and their families are about to get their first up-close look at so-called "Trump accounts" now that the specialized investing accounts are days from going live.

For a year, the Trump administration has touted the wealth-building potential of the accounts. Babies born between 2025 and 2028 are getting $1,000 in starter money from the U.S. Treasury under a sweeping 2025 tax law.

Meanwhile, corporations and big-name philanthropists lined up to say they would be adding money. A $6.25 billion pledge from Michael and Susan Dell will put $250 in the accounts of kids under age 10 in eligible areas.

In the latest corporate announcement, Micron Technology (MU) said Tuesday it will contribute to the accounts of employees' kids. The memory-chip maker's $250 million donation will also contribute to the accounts of children in the states where it operates.

For all the talk, however, the accounts have only existed on paper for families. Now the investing starts.

Beginning July 4, families will be able to see the federal government's $1,000 contribution to the account, according to a senior Treasury Department official. Parents and guardians will also be able to contribute to the accounts starting that day.

So far, there have been over 6 million account sign-ups, including approximately 1.4 million accounts claiming the $1,000 seed money, according to a senior Treasury Department official.

Too few families know about the accounts, say some early-childhood advocates. Many parents who have enrolled their child for an account are still trying to understand the basics.

Here's what to expect when you are expecting "Trump account" money. And here's how families can sign up if they haven't done so yet:

When am I going to see the money in my kid's account? And when can I put in money?

The money should show in the activated accounts as soon as July 4. Bear in mind that's a holiday and the weekend. The seed money may show as pending or on the way, the Treasury official noted. The investing starts when stock markets open Monday.

The accounts have to be activated before the funds go in, the Treasury official said.

Saturday is when people can start depositing more money in the accounts. Parents can use their debit cards, or electronic payments with an ACH transfer from their bank account, the official said. They can also share a code that allows friends and family to contribute.

There's a $5,000 annual contribution limit. That amount is indexed to increase with inflation starting next year, according to the IRS.

Donors don't get a tax deduction for "Trump account" contributions. The IRS recently eased some of the hassle for donors when it clarified they do not have to file a gift tax return reporting the donation.

Philanthropists will be allowed to donate stock of public companies to the accounts, the Treasury Department announced Thursday. Philanthropic and charitable donations do not count toward the $5,000 contribution limit.

The money is in the account. Now what can I do with it?

Not much for now. The money cannot be withdrawn until the child reaches age 18. From there, IRA tax rules apply. The money can continue growing to build a nest egg, or it can be used for education, first-time home purchases and up to $1,000 in yearly emergency expenses.

The money has to be invested in low-cost index funds investing in the U.S. stock market. On Wednesday, the Treasury Department announced the starting lineup of five funds.

For now, all the money will start out in the State Street SPDR Portfolio S&P 500 ETF SPYM. Account holders will be able to put money in the other funds in the coming months, the Treasury Department said.

One point of mandating U.S. stock-market exposure with the funds is to give future generations buy-ins on America's economy. Some critics say the accounts' returns could suffer from a lack of exposure to the bond market or global equities.

Can I move the accounts?

Bank of New York Mellon Corporation (BNY) and Robinhood (HOOD) have worked together to build the infrastructure behind the accounts.

But if someone wants to keep track of the money alongside other retirement and investment accounts, they may have options. Major brokerages like Fidelity Investments and Vanguard say account holders will eventually be able to roll over the accounts onto their platforms.

I didn't enroll my child yet. Is it too late?

There's a "Trump accounts" app and a website, but launching an account really starts at the IRS. There's no automatic enrollment in the accounts for now.

Parents were able to file the paperwork to establish the account when they did their 2025 income taxes. Or they can still fill out Form 4547 with the IRS here. The child needs a valid Social Security number

There's still a lot of money being left on the table. While about 6 million children are signed up for the accounts, that's far below the roughly 70 million U.S. children counted by the Census Bureau in 2024. Ideally the accounts will help low-income families fund some of life's biggest expenses, but a recent report from the Urban Institute found that awareness of the program was highest among older and wealthier people. Treasury Department officials said Thursday they are working on raising awareness.

How long do families have to claim the $1,000?

Raising a child is hectic and it's possible the parents and guardians of a newborn might learn of the account and its $1,000 starter money later on.

There should be time, said Erin Koeppel, the CFP Board's managing director of government relations & public policy.

In its proposed rules, the IRS has said children eligible for the $1,000 can claim it at any point during the growth period from birth to the last day of the year the beneficiary turns age 17. The rule isn't final yet, she noted.

Of course, there's "one critical point for families," she said. They have to sign up for an account first.

-Andrew Keshner

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07-02-26 1841ET