The Internal Revenue Service rolled out Trump Accounts, a new tax-advantaged savings program for children that includes a one-time $1,000 federal contribution and permits annual deposits of up to $5,000. The accounts cannot be funded before July 4, 2026, the IRS said.
Parents, guardians and others can establish a Trump Account for an eligible child. The federal government will make the $1,000 contribution for each qualifying child. Four million children have been signed up, with 1 million claiming the pilot program contribution, the IRS said.
Individuals can contribute up to $5,000 per year to an account. Employers can contribute up to $2,500 annually toward an employee's or dependent's Trump Account. Employer contributions are generally deductible and excluded from employees' taxable income, the IRS said.
Funds must be invested in certain mutual funds or exchange-traded funds that track a U.S. stock index such as the S&P 500. The IRS did not specify which other indexes qualify.
Money generally cannot be withdrawn before the year the child turns 18. After that point, the account is treated like a traditional individual retirement account with similar tax rules, the IRS said.
The agency issued proposed regulations on employer contributions and provided a safe harbor for certain deposits. Taxpayers can view and submit Trump Account elections through their IRS Individual Account, the agency said.
Separately, the Working Families Tax Cuts made up to $5,000 of the adoption credit refundable for tax years beginning after Dec. 31, 2024. The amount is indexed for inflation. Any credit carried forward from prior years cannot be used to calculate the refundable portion, the IRS said.
The law also expanded Health Savings Account eligibility starting Jan. 1, 2026. Bronze and catastrophic health insurance plans are now treated as HSA-compatible whether purchased through an exchange or not. People enrolled in certain direct primary care service arrangements may contribute to an HSA if they otherwise qualify and use HSA funds tax-free to pay periodic fees, the IRS said.
The agency ended several clean vehicle credits effective Sept. 30, 2025. The New Clean Vehicle Credit, Used Clean Vehicle Credit and Qualified Commercial Clean Vehicle Credit are not allowed for any vehicle acquired after that date. The Energy Efficient Home Improvement Credit is not allowed for property placed in service after Dec. 31, 2025, and the Residential Clean Energy Credit is not allowed for expenditures made after that date, the IRS said.