Trump account $1,000 baby benefit has no claim deadline
The new child investment accounts launched July 4, with a separate Dell-funded $250 deposit available to the first 25 million eligible children.
By Frankie Delgado · News Reporter
2 min read
Parents eyeing the federal government’s $1,000 starter deposit for a child’s new Trump account do not have a cutoff date to beat, MarketWatch reported.
The accounts, which became available July 4, are tax-deferred investment accounts for children younger than 18. MarketWatch reported that the government deposit applies to U.S. citizens born from Jan. 1, 2025, through Dec. 31, 2028.
Treasury Department officials said about 6 million accounts have been created so far, and roughly 1.4 million have claimed the $1,000 contribution, according to MarketWatch.
How the accounts work
Trump accounts are designed as long-term savings vehicles for children, according to MarketWatch. The money can later be used for goals such as education, a first home or retirement.
The annual contribution limit is $5,000, MarketWatch reported. Family members, friends, employers and charitable organizations may all put money into the accounts.
When the child turns 18, the account converts into an IRA, according to MarketWatch. After that, the account holder generally must wait until age 59½ to withdraw funds without a penalty.
MarketWatch reported that there are exceptions to the penalty rule, including withdrawals for education or a first home. Distributions are taxable, and some financial planners have said young adults should consider converting the money into a Roth account.
The $250 wrinkle
There is a separate $250 contribution for some children who do not qualify for the federal $1,000 deposit, and that pot does come with a practical limit, MarketWatch reported.
Michael and Susan Dell have pledged $6.25 billion for Trump accounts, according to MarketWatch. Under that charitable commitment, the first 25 million children who meet the rules can receive a $250 contribution.
To qualify for the Dell-funded deposit, children must be 10 or younger and live in ZIP codes where the median income is below $150,000, MarketWatch reported.
The White House said on its website that the Dell gift would give millions of low- and middle-income children a stronger chance at reaching the American Dream.
Parents can check whether a child qualifies for the $250 contribution through Invest America’s website, according to MarketWatch.
How families can open one
Families can open a Trump account using IRS Form 4547 or by signing up through the program’s app, MarketWatch reported.
The Social Security Administration has also said it will help families open accounts. The agency already works with hospitals to assign Social Security numbers to newborns, and MarketWatch reported that it will help states add automatic Trump account creation to hospital paperwork.
This story draws on original reporting from MarketWatch.