If you have a child under 18, there’s a good chance an email from the IRS landed in your inbox this week with the subject line “Claim your child’s Trump Account today!” Your first instinct might be to delete it. It looks like the kind of message scammers love to send.
Here’s the good news: the email is real. Here’s the caution: copycat messages are already circulating, so it pays to know exactly what these accounts are and how to claim one safely.
What Is a Trump Account?
Trump Accounts were created by the Working Families Tax Cuts law as a long-term savings and investment account for children. Think of it as a starter retirement account that a child begins building long before they ever earn a paycheck.
The Treasury Department has already opened accounts automatically for tens of millions of children under 18 who have a valid Social Security number. That’s why you may be getting an email about an account you never signed up for. The account exists; it just hasn’t been claimed yet.
Should You Claim It?
Claiming the account is what lets you take control of it. Once you claim it, you can:
- View and manage the account
- Accept contributions from family, friends, and employers
- Elect the $1,000 Treasury seed deposit, if your child qualifies
You can claim the account at TrumpAccounts.gov or through the official Trump Accounts app. You’ll verify your identity, confirm your relationship to the child, and accept the account terms.
A few things to know before you claim:
- There’s no deadline. You can claim at any time before your child turns 18.
- Claiming is permanent. Once claimed, the account can’t be closed.
- If parents are separated, the first eligible adult to complete the claim controls the account, so it’s worth talking it through ahead of time.
What Happens If You Don’t Claim It?
Nothing bad. The account stays open and invested in a government-managed pool, and it can still hold certain donor money that has already been deposited. But until it’s claimed, you can’t manage it, family members can’t add to it, and an eligible child won’t receive the $1,000 seed deposit.
The $1,000 Seed Deposit
Children born between January 1, 2025, and December 31, 2028, who are U.S. citizens can receive a one-time $1,000 deposit from the Treasury. This deposit requires an election, which you make when you claim the account. If you have a child born in that window, this is the strongest reason to claim sooner rather than later.
How the Money Is Invested
Until the child turns 18, Trump Account funds can only be invested in low-cost index funds that track the S&P 500 or a similar broad U.S. stock index, with fees capped at 0.1%. Bank of New York Mellon manages the accounts as trustee for the Treasury. Right now, investment choices are very limited, and money is invested as soon as it arrives.
Contributions and Tax Treatment
- Annual limit: Family and friends can contribute up to $5,000 per child per year combined, by December 31. The $1,000 seed deposit doesn’t count toward that limit.
- Employer contributions: Employers can contribute up to $2,500 per year toward an employee’s child’s account, and that amount is tax-free to the employee. It counts toward the $5,000 total.
- Not deductible: Contributions aren’t tax-deductible, but they create after-tax basis for the child, and the earnings grow tax-deferred.
- Gift tax: Contributions are considered gifts and count toward your annual gift tax exclusion for each child ($19,000 for 2026). If you’re already giving to a child through other gifts, a 529 plan, or a trust, coordinate so you stay within the limit.
What Happens at Age 18?
The year your child turns 18, the Trump Account automatically becomes a traditional IRA in their name, and the investment options open up. From there, normal IRA rules apply. Withdrawals are generally taxable (except for the after-tax contributions) and may face a 10% early withdrawal penalty.
One planning opportunity to keep in mind: converting to a Roth IRA while your child is young and in a low tax bracket could mean paying a small amount of tax now in exchange for tax-free growth for decades.
How to Spot a Trump Account Scam
Because these accounts are new and involve real money, scammers are paying attention. Protect your family by keeping these rules in mind:
- Go to the source. Type TrumpAccounts.gov into your browser or download the official app instead of clicking links in texts or emails.
- No fees, ever. It costs nothing to claim or open an account. Anyone asking for a fee to “speed up” your $1,000 is a scammer.
- Guard your information. The Treasury will never ask for passwords, one-time codes, your child’s Social Security number, or bank logins by email, text, or phone.
- Watch for pressure. Urgent countdowns and “act now” threats are red flags.
If you think you’ve been targeted, report it at ReportFraud.ftc.gov. If you shared personal information, change your passwords and monitor your credit.
Every Family’s Situation Is Different
Trump Accounts can be a valuable tool, but how they fit into your overall plan depends on your family’s goals, your other savings for your children, and your tax picture. Before you contribute, it’s worth a conversation with your tax, legal, and financial advisors.
Have questions about Trump Accounts, gift tax limits, or saving for your kids? Contact J.A. Green Accounting. We’re here to help Waco families make confident financial decisions.
This article is for general informational purposes only and is not tax, legal, or investment advice.
