Tax season is here, and parents of minor children should note a new form that’s important to keep in mind. The IRS has introduced Form 4547, which allows taxpayers to register eligible children for Trump accounts when submitting their 2025 tax returns.
The main feature of these accounts won’t kick in until late 2026, but taxpayers can enroll in the program by making an election on their 2025 return.
Here’s what you need to know:
elections must be held
You can conduct elections using Form 4547, which is now available on the IRS website. The form is just one page but serves two purposes: it lets authorized individuals open a Trump Account for their eligible child and allows you to request a $1,000 contribution to the federal testing program if your child qualifies.
It’s crucial to remember that if a taxpayer wants to make a PILOT contribution, they must actively check the box requesting it; opening an account alone doesn’t mean the $1,000 will automatically be deposited.
A helpful detail for parents is that Form 4547 allows the election of two children on a single form. If you have more than two eligible kids, you can file additional forms.
The form also introduces the idea of a “responsible person,” who will coordinate with the Treasury Department to manage the account. This person will be your main contact for activation and must complete identity verification.
timing is important
Taxpayers can file Form 4547 on paper or electronically along with their 2025 returns. It’s also possible to file it after tax season, for instance, when it becomes available through an online portal.
Once the election is processed, the Treasury Department will work on establishing the account and send activation instructions to the responsible person. The activation process is expected to start in May 2026 and will involve identity verification. The account won’t be fully usable until this step is complete.
Regarding funding: any contributions—whether from parents, employers, or governments—cannot occur before July 4, 2026, including that $1,000 pilot donation.
Who can open an account
This step highlights the difference between opening an account and requesting a pilot donation.
If a taxpayer only opens the Trump account, the IRS prioritizes who can be an authorized individual: first a legal guardian, then a parent, followed by an adult sibling, and lastly, a grandparent.
However, if a $1,000 pilot contribution is involved, the rules tighten. In such cases, the authorized individual needs to reasonably expect the child to qualify in the applicable tax year.
This creates some nuances for families. Taxpayers don’t have to have claimed the child as a dependent on their 2025 return to file Form 4547. But indicating they have does mean they’re making a commitment. The instructions stress that taxpayers seeking test contributions should be sure they meet the qualifying child’s requirements for the election year (2026, if they file now).
The IRS does present a little flexibility—an election can be valid even if the qualifying child status changes later, as long as other requirements are satisfied. Yet, taxpayers should carefully consider the rules if they are requesting pilot contributions.
Donation limits and withdrawals
The Trump account has a $5,000 annual contribution limit, adjusted for inflation starting in 2027, but this doesn’t apply to all contributions.
That $5,000 cap is specific to contributions by employers and family members. Employers can contribute up to $2,500 each year, and these contributions will not count as taxable income.
Other donations, including pilot program contributions and certain rollover contributions, are beyond that limit and won’t reduce the $5,000 limit available for family or employer contributions.
Some contributions, like Federal Test Contributions and Qualified General Contributions, don’t form the basis of a Trump Account. Conversely, after-tax contributions from parents and grandparents do form the basis.
Why is this basis important? Once the beneficiary turns 18, withdrawals from the Trump Account are treated like distributions from a traditional IRA. Some of these distributions might be taxable, and some might be tax-free, so it’s necessary to keep careful records, especially when funds come from different sources over time.
Until then, accessing funds from a Trump account will be quite limited. These accounts are meant as long-term savings, and typically, distributions are not allowed for beneficiaries under 18. There are exceptions, such as transferring the account to another Trump account or distributing it in the event of the beneficiary’s death. Conditional rollovers, like a limited rollover to an ABLE account at 17, are allowed.
Difficult withdrawals are a no-go, and you can’t simply liquidate your account just because your situation changes.
However, once the beneficiary turns 18, many of these constraints lift, and the account operates similarly to a traditional IRA.
investment
The Trump account does face significant investment restrictions, which some criticize. Eligible investments must track a U.S. stock index, avoid leverage, and maintain an annual fee cap of 0.1%.
Trustees must enforce compliance, including using default investment options. If an investment fails to meet eligibility requirements due to higher fees, corrective actions must be taken.
Cash and money market funds aren’t usually allowed, except in some cases.
Before filing Form 4547
Thinking of filing Form 4547 with your 2025 tax return? The instructions suggest confirming that you can say yes to these questions:
- The child is under 18 by the end of the election and has a valid Social Security number.
- You qualify as a qualified individual (especially if requesting a pilot donation, you need to expect the child to be qualifying).
- You understand that no contributions can be made until after July 4, 2026.
- You’re set to complete the account activation process, including identity verification, ready for 2026.
Wait, what happens to that extra seed money?
You might recall that Michael and Susan Dell committed $6.25 billion to seed Trump accounts with $250 each for around 25 million children under ten born before 2025, who aren’t eligible for the $1,000 test program. If not enough families with fewer than ten kids sign up, the remaining funds could go to older children. To be eligible, kids must live in areas where the median household income is below $150,000.
Details regarding that seed money haven’t been provided in Form 4547, its instructions, or IRS guidance. More information might come out separately.
What happens next for taxpayers?
With Form 4547 now available, parents can open a Trump account this tax season. However, the funds aren’t accessible yet. If you’re considering getting involved, make sure you’re aware of the final regulations from the Treasury Department and the IRS.
If you want to stay informed, checking back regularly is a great idea.
