How do these accounts compare to other accounts available for kids?
Trump Accounts - Frequently Asked Questions
A. What Trump Accounts Are and Why They Matter
1. What is a Trump Account?
A Trump Account is a special type of traditional individual retirement account (IRA) created under Internal Revenue Code section 530A for children under age 18. It features restricted, low-cost index investing during a "growth period" and then generally follows traditional IRA rules after the child turns 18.
2. Why should I open a Trump Account for my child?
Trump Accounts give your child a long-term, tax-advantaged savings head start. Eligible children receive a $1,000 federal pilot contribution, and you can add up to $5,000 per year (as adjusted) during the growth period—invested exclusively in low-cost, broadly diversified equity index funds—to compound tax-deferred until withdrawal.
3. How is opening a Trump Account through CleverAlpha different from opening one elsewhere?
CleverAlpha handles the IRS paperwork on your behalf, uses Velocity Clearing, LLC—a trusted, IRS-approved nonbank custodian—to hold your funds securely, and automatically manages your account into the required eligible investments. You sit back and watch your child's account grow with no active management needed.
4. Who owns the Trump Account—me or my child?
Your child is the legal owner and account beneficiary from day one. You (or another authorized adult) act as the "responsible party" with authority to manage the account on your child's behalf until they turn 18.
5. What is the "growth period"?
The growth period runs from account establishment until December 31 of the calendar year in which the child turns 18. During this period, special contribution, investment, and distribution rules apply. After the growth period, most special rules drop away and traditional IRA rules take over.
6. Is a Trump Account a Roth IRA or a regular IRA?
A Trump Account is a traditional IRA under section 408(a), not a Roth IRA. After the growth period, the account can be converted to a Roth IRA if you meet standard conversion requirements and are willing to pay tax on the conversion.
7. Is this program permanent, or will it end?
The statutory framework for Trump Accounts is permanent. The one-time $1,000 pilot contribution is limited to children born between January 1, 2025, and December 31, 2028, and requires a timely election.
8. Is opening a Trump Account mandatory?
No. Participation is entirely voluntary. Parents and guardians elect to open the account and claim the $1,000 pilot contribution if their child qualifies.
9. How does a Trump Account differ from a 529 plan or Coverdell ESA?
Trump Accounts have stricter investment rules (index funds only) and near-total distribution lock-up during the growth period, but they offer a $1,000 federal seed contribution, up to $5,000/year in tax-deferred contributions, and flexible post-18 withdrawal options (higher education, first home, retirement). 529s offer higher contribution capacity and potential state tax deductions but must be used for qualified education expenses; Coverdells cap contributions at $2,000/year and have income limits for contributors.
10. Can I have both a Trump Account and a 529 for the same child?
Yes. The accounts serve complementary purposes and are governed by separate contribution rules and tax treatment.
B. Eligibility and Who Can Open an Account
11. Which children are eligible for a Trump Account?
Any individual who: (1) has not reached age 18 before the end of the calendar year in which the election is made, (2) has a Social Security number issued before the election, and (3) has had no prior Trump Account election made on their behalf.
12. Does my child need to be a U.S. citizen?
U.S. citizenship is explicitly required for the $1,000 pilot contribution under section 6434. For the underlying Trump Account, the key requirement is a valid Social Security number; citizenship is not explicitly stated in section 530A, but practical IRS procedures may align with pilot program requirements.
13. Who can make the election to open a Trump Account on behalf of a child?
The authorized individual, in this priority order: legal guardian, parent, adult sibling, or grandparent. If multiple individuals share the same highest priority level (e.g., two parents), any one of them may make the election.
14. Can I open more than one Trump Account for my child?
No. Once the IRS processes an election to open an initial Trump Account for a child, it will not process further elections for that same child.
15. Can a Trump Account be opened for a child who is already 18 or older?
No. The child must not have attained age 18 before the close of the calendar year in which the election is made.
16. Does my child need to have a job or earned income to qualify?
No. Contributions can be made during the growth period even if the account beneficiary has no includible compensation or earned income.
17. Can an older teen or emancipated minor open their own Trump Account?
The statute and IRS guidance focus on authorized adults (guardian, parent, adult sibling, or grandparent). Whether an emancipated minor can act as the authorized individual will depend on forthcoming regulations and state law.
18. Can the IRS automatically open Trump Accounts without a parent's request?
Yes. The Secretary may elect to establish a Trump Account if IRS data show the child meets eligibility requirements and no prior election exists, though default creation procedures are still being developed.
19. What if my child doesn't have a Social Security number yet?
You must obtain a Social Security number for your child before making the election to open the Trump Account.
20. What happens if two people try to open accounts for the same child?
The IRS will process the first valid election received. Subsequent attempts to open an initial Trump Account for that child will be rejected.
C. Opening and Activating Your Account with CleverAlpha
21. How do I open a Trump Account through CleverAlpha?
Visit CleverAlpha.com/trump-accounts and complete our secure online enrollment. We will submit IRS Form 4547 (or use the online tool on trumpaccounts.gov) on your behalf, coordinate with Velocity Clearing as your custodian, and send you activation instructions once the IRS processes your election.
22. Can I file Form 4547 myself instead of using CleverAlpha?
Yes, you may file directly using IRS Form 4547 or the online tool at trumpaccounts.gov. However, CleverAlpha streamlines the process, handles custodian coordination, and automatically sets up eligible investment management for you.
23. When can I open a Trump Account?
You can make the election anytime before January 1 of the calendar year in which the child turns 18. For 2026, the online tool at trumpaccounts.gov and activation flows are expected to be available starting in mid-2026.
24. Who is the "responsible party" for the Trump Account?
The responsible party is the individual who made the election and has authority to select among eligible investments, request rollovers, and designate a successor responsible party, subject to applicable law and the account agreement with Velocity Clearing.
25. Can I change the responsible party later?
Yes, if permitted by law and the custodial agreement. CleverAlpha and Velocity Clearing will provide procedures for changing the responsible party (for example, upon custody or guardianship changes).
26. Why is Velocity Clearing the custodian for CleverAlpha Trump Accounts?
Velocity Clearing, LLC is an IRS-approved nonbank trustee and custodian under section 408 and is automatically approved to act as trustee for Trump Accounts. Velocity provides secure, regulatory-compliant custody and reporting, and integrates seamlessly with CleverAlpha's digital investment management platform.
27. Can I move my child's Trump Account to another custodian later?
Yes. During the growth period, you may establish a "rollover Trump Account" at another IRS-approved trustee and transfer the entire balance via a qualified rollover contribution. After the growth period, standard IRA rollover and transfer rules apply.
28. Is there a fee to open a Trump Account with CleverAlpha?
CleverAlpha does not charge application or account opening fees. Our standard advisory fee structure applies: $1/month for accounts under $5,000, and 0.25% per annum (25 basis points) for accounts $5,000 and above. Fund-level investment expenses are capped at 0.1% by statute.
29. When will I receive activation instructions?
The IRS and CleverAlpha will send activation information starting around May 2026 for elections processed timely. You'll complete a brief authentication process to finalize account opening with Velocity Clearing.
30. Can an existing IRA be converted into a Trump Account?
No. An existing account cannot be amended or redesignated as a Trump Account. The account must be designated as a Trump Account at its establishment, with a written governing instrument and proper titling.
D. The $1,000 Pilot Contribution
31. What is the $1,000 Trump Account pilot program?
Under section 6434, eligible children can receive a one-time $1,000 payment to their Trump Account, funded by the federal government, if an election is made by an authorized individual. These $1,000 payments are also known as a pilot contribution, seed contribution, seed investment, seed money, seed payment, principal seed amount, seed deposit, initial deposit, federal contribution, or jump-start amount.
32. Which children qualify for the $1,000 pilot contribution?
A qualifying child under section 152(c) who is a U.S. citizen, born after December 31, 2024 and before January 1, 2029, for whom no prior pilot election has been made, and whose Social Security number is included in the election.
33. How do I claim the $1,000 for my child?
When you enroll through CleverAlpha, we include the pilot program election on Form 4547 (or the online tool) if your child qualifies. You simply confirm eligibility during enrollment, and we handle the rest.
34. Does the $1,000 pilot contribution reduce other federal benefits or tax refunds?
No. The pilot contribution is excepted from reduction or offset and has a special interest rule under section 6611(a).
35. Can I get more than one $1,000 pilot contribution for the same child?
No. Only one pilot program election and contribution is allowed per eligible child.
36. When will the $1,000 be deposited into my child's account?
The contribution will be deposited no earlier than July 4, 2026, and as soon as practicable after the election is processed and the Trump Account is opened with Velocity Clearing.
37. Does receiving the $1,000 create basis (after-tax contributions) in the account?
No. Pilot program contributions do not create basis in the Trump Account. The full $1,000 grows tax-deferred and is taxed as ordinary income upon withdrawal (unless rolled into a Roth or subject to other exceptions).
38. Is the $1,000 taxable income to my child when deposited?
No. Contributions made during the growth period, including the pilot contribution, are not includible in the beneficiary's income when made.
39. What if my child doesn't end up being my qualifying child for tax purposes?
If you reasonably anticipated that the child would be your qualifying child at the time of the election and complied with the rules, the election is not invalidated solely because the child later does not meet the qualifying child definition.
40. Are there penalties for making a false or improper pilot election?
Yes. Individuals making improper elections can be subject to penalties under section 6659.
E. Contributions – Types, Limits, and Rules
41. What types of contributions can be made to a Trump Account during the growth period?
Five types: (1) $1,000 pilot program contribution, (2) qualified general contributions (from governments or 501(c)(3)s), (3) section 128 employer contributions, (4) qualified rollover contributions, and (5) other contributions from any source (parents, grandparents, the child, or anyone else).
42. What is the annual contribution limit for my own contributions?
For 2026 and 2027, the combined limit for section 128 employer contributions plus other contributions from any source is $5,000 per year, subject to cost-of-living adjustments after 2027.
43. Which contributions are exempt from the $5,000 annual limit?
Pilot program contributions, qualified general contributions, and qualified rollover contributions do not count toward the $5,000 limit.
44. Can grandparents, relatives, or friends contribute to my child's Trump Account?
Yes. "Other contributions" can come from anyone—parents, grandparents, relatives, friends, or the child themselves—subject to the $5,000 aggregate annual cap (as adjusted).
45. Does my child need earned income for me to contribute?
No. Contributions during the growth period can be made regardless of whether the child has any includible compensation or earned income.
46. Do all contributions create basis (after-tax dollars) in the account?
No. Only contributions from "other sources" during the growth period create basis. Pilot program contributions, qualified general contributions, and section 128 employer contributions do not create basis. Basis from prior Trump Accounts carries over in a qualified rollover.
47. When can contributions start?
Contributions to Trump Accounts cannot be made before July 4, 2026. CleverAlpha will begin accepting contributions on or after that date once your account is activated with Velocity Clearing.
48. Can I also contribute to a regular IRA for my child in the same year?
Yes, if your child has earned income. Contributions to a Trump Account during the growth period are subject to section 530A limits and are separate from contributions to non-Trump IRAs, which are subject to normal IRA contribution limits and compensation requirements.
49. Can I "backdate" a Trump Account contribution to the prior tax year, like I can with a traditional IRA?
No. For any taxable year ending during the growth period, a contribution is treated as made in the calendar year it is actually contributed. The IRA "up to the tax return due date" look-back rule does not apply during the growth period.
50. If I contribute $3,000 from my own funds and my child's employer contributes $2,500, have I exceeded the limit?
Yes. The $5,000 cap (as adjusted) applies to the aggregate of section 128 employer contributions and contributions from other sources. In this example, the total is $5,500, so $500 would be an excess contribution subject to corrective distribution.
F. Qualified General Contributions and Employer Programs
51. What is a qualified general contribution?
It is a contribution funded by a state, the U.S., the District of Columbia, an Indian tribal government, or a 501(c)(3) organization and distributed by the Secretary into the Trump Accounts of a specified "qualified class" of account beneficiaries.
52. Who decides which children receive qualified general contributions?
The contributing entity (state, government, or charity) proposes a qualified class—defined by criteria such as geography, birth year, or jurisdiction—subject to Treasury approval. The class cannot impose extra eligibility conditions beyond the statutory requirements.
53. Is there a minimum amount for qualified general contributions?
For 2026 and 2027, the total general funding contribution must be sufficient to allocate at least $25 per Trump Account for each member of the qualified class.
54. Do qualified general contributions create basis in my child's account?
No. Qualified general contributions do not create basis and are fully taxable upon distribution.
55. What is a section 128 employer contribution?
It is a contribution made by an employer to a Trump Account of an employee or an employee's dependent under a written Trump Account contribution program that meets requirements similar to section 129 dependent care assistance programs.
56. What is the annual limit for section 128 employer contributions?
$2,500 per employee per year (subject to cost-of-living adjustments after 2027). This limit applies per employee and aggregates contributions for all dependents of that employee.
57. Are section 128 employer contributions taxable to the employee?
No. Section 128 employer contributions are not includible in the employee's gross income.
58. Do employer contributions count toward my $5,000 contribution limit?
Yes. Section 128 employer contributions plus other contributions from any source share the $5,000 aggregate annual limit (as adjusted) during the growth period.
59. Can employers offer Trump Account contributions through a cafeteria plan (section 125)?
Employers may integrate Trump Account contributions in ways similar to dependent care assistance, but detailed coordination with section 125 and ERISA is subject to further DOL and IRS guidance. Contributions to an employee's own Trump Account via a cafeteria plan are prohibited as deferred compensation.
60. Can a charity or nonprofit fund Trump Accounts for a group of children?
Yes. A 501(c)(3) organization can fund a qualified general contribution and designate a qualified class, subject to Treasury approval and statutory rules. This furthers the organization's exempt purpose.
G. Investments, Eligible Funds, and Fees
61. What can my child's Trump Account be invested in during the growth period?
Only "eligible investments": certain mutual funds or ETFs that track the returns of an approved broad equity index of primarily U.S. companies, do not use leverage, and have annual fund-level fees and expenses not exceeding 0.1% of the account balance in that fund.
62. What is a "qualified index" for Trump Accounts?
The S&P 500 or another broad equity index comprised primarily of U.S. securities for which regulated futures contracts trade on a qualified board or exchange. Sector-specific or industry-specific indexes are not permitted.
63. Can CleverAlpha use actively managed funds or stock-picking strategies?
No. During the growth period, all investments must passively track an eligible index. CleverAlpha selects from a curated menu of ultra-low-cost index mutual funds and ETFs that comply with section 530A requirements.
64. Can leveraged or inverse ETFs be used in a Trump Account?
No. Eligible investments must not use leverage. Funds designed to amplify or invert index returns are not permitted.
65. What is the maximum fund-level fee allowed, and how does CleverAlpha keep fees low?
The statute caps fund-level fees at 0.1% (10 basis points) of the balance invested in that fund. CleverAlpha selects only the lowest-cost index funds and ETFs available to meet this requirement, ensuring maximum net growth for your child.
66. Can the account hold cash or money market funds?
Temporary cash holdings are permitted to facilitate contributions, trades, and dividend sweeps. Over time, funds must be invested in eligible index funds or ETFs. CleverAlpha's platform handles this automatically.
67. Who ensures that investments remain "eligible"?
Velocity Clearing, as trustee, monitors eligible investment status and must remediate any investment that ceases to qualify. CleverAlpha's platform continuously tracks fund compliance and adjusts as needed.
68. What happens if a fund stops meeting the eligible investment criteria?
The trustee must take corrective action—typically liquidating the non-eligible investment within a reasonable period and reinvesting in an eligible option. CleverAlpha will handle this proactively and notify you if action is taken.
69. Can I or my child trade frequently between different eligible index funds?
That depends on Velocity Clearing's platform policies (e.g., frequent trading restrictions). During the growth period, all trades must stay within the eligible investment universe. CleverAlpha's systematic rebalancing is designed to minimize unnecessary trading.
70. What investment rules apply after the growth period ends?
After the growth period (January 1 of the year the child turns 18), the special eligible-investment restrictions generally end, and the account may follow broader traditional IRA investment rules, subject to any continuing Trump-specific restrictions and trustee policies.
H. Distributions and Withdrawals
71. Can I withdraw money from my child's Trump Account during the growth period?
Generally no. Distributions are prohibited during the growth period except for: (1) qualified rollover contributions to another Trump Account, (2) qualified ABLE rollovers, (3) distributions of excess contributions, and (4) distributions upon the account beneficiary's death.
72. What is a qualified ABLE rollover from a Trump Account?
It is a transfer of the entire Trump Account balance to an ABLE account for the same beneficiary, allowed only in the calendar year the beneficiary turns 17. The Trump Account then closes.
73. What happens if there is an excess contribution?
Excess contributions can be distributed. Velocity Clearing and CleverAlpha have procedures in place to prevent excess contributions by rejecting or partially accepting contributions before they hit the account.
74. What happens to the Trump Account if my child passes away during the growth period?
The account stops being a Trump Account/IRA, and its fair market value (less basis) is generally included in the income of the person who acquires the assets or, if paid to the estate, on the decedent's final return. Special basis and reporting rules apply.
75. What distribution rules apply after my child turns 18?
Distributions are governed by traditional IRA rules: taxable to the extent of earnings and pre-tax contributions, and subject to the 10% additional tax on early distributions unless an exception under section 72(t) applies (e.g., qualified higher education expenses, first-time home purchase, disability, age 59½).
76. Will early withdrawals after age 18 trigger penalties?
Yes, unless an exception applies. Common exceptions include qualified higher education expenses, first-time home purchase (up to $10,000), disability, substantially equal periodic payments, and distributions after age 59½.
77. Can I close and distribute my child's Trump Account during the growth period for an emergency?
No. Except for the narrow permitted distributions (rollovers, ABLE transfers, excess contributions, and death), closure and distribution during the growth period are not allowed.
78. Does the Trump Account change its tax character after the growth period?
It remains a Trump Account for certain structural purposes but is largely governed by traditional IRA distribution and contribution rules. Some constraints remain permanent, such as the prohibition on SEP/SIMPLE contributions and separate basis aggregation rules.
79. Can the governing instrument automatically transfer assets to a regular IRA at age 18?
Yes. The governing instrument may provide that immediately after the growth period, all assets are transferred to a non-Trump traditional IRA for the beneficiary at the same trustee (Velocity Clearing), in which case the Trump Account can be closed and post-growth rules need not be reflected in that instrument.
80. Are required minimum distributions (RMDs) applicable to Trump Accounts?
After the growth period and once the beneficiary reaches the applicable RMD age under traditional IRA rules, RMDs apply.
I. Rollovers and Transfers
81. What is a rollover Trump Account?
A rollover Trump Account is a Trump Account created during the growth period and funded initially by a trustee-to-trustee transfer of the entire balance from an existing Trump Account for that same beneficiary.
82. Can I establish a rollover Trump Account after my child turns 18?
No. A rollover Trump Account can only be established for an individual who has not attained age 18 before the end of the calendar year in which the rollover account is created.
83. Can my child have more than one funded Trump Account at a time?
No. A qualified rollover contribution requires transferring the entire balance, and the transferring Trump Account must be closed after the rollover. There can only be one funded Trump Account for a beneficiary at any time during the growth period.
84. What happens to trailing dividends after a full rollover?
Trailing dividends received by the transferring trustee after the qualified rollover must be promptly transferred to the new rollover Trump Account and are treated as part of the original rollover.
85. Can a Trump Account be rolled into an employer retirement plan after the growth period?
After the growth period, a Trump Account may be rolled over or transferred to certain eligible retirement plans as allowed under section 408(d)(3), but if there is basis in the Trump Account, it can only be rolled to another IRA, not to employer plans described in specific subsections.
86. Can a Trump Account transfer assets to another IRA at the same custodian without closing?
After the growth period, standard trustee-to-trustee transfers to another IRA (including with the same custodian, Velocity Clearing) can be made under Rev. Rul. 78-406, subject to basis and Trump-specific aggregation rules.
87. Can a Trump Account ever be merged with other IRAs for basis purposes?
No. Accounts established as Trump Accounts are permanently excluded from aggregation with other IRAs when allocating basis on distributions.
88. What must a receiving trustee verify before accepting a rollover contribution?
The receiving trustee must confirm that the first contribution is a qualified rollover contribution and must obtain information from the transferring trustee that the originating account is a Trump Account and details regarding basis and prior contributions.
89. Can partial rollovers be made during the growth period?
No. A qualified rollover contribution requires transfer of the entire balance of the Trump Account.
90. Is there a limit on the number of times a Trump Account can be rolled over during the growth period?
There is no explicit numeric limit in the guidance, but each rollover must transfer the full balance and close the prior account. Practical limits depend on trustee processes and forthcoming regulatory refinements.
J. Reporting, Compliance, and Trustee Responsibilities
91. What reporting applies to Trump Accounts during the growth period?
Reporting is governed by section 530A(i), not 408(i). Velocity Clearing must report contributions (by source type), distributions, fair market value, and basis to the IRS and the beneficiary, and must report qualified rollovers to the IRS within 30 days.
92. What reporting applies after the growth period?
Once the growth period ends, standard IRA reporting rules under section 408(i) apply. A Trump Account is never subject to both 530A(i) and 408(i) reporting in the same year.
93. Are there penalties for trustee reporting failures?
Yes. Failure to provide required reports under section 530A(i) can result in penalties under section 6693(a), unless the failure is due to reasonable cause. Velocity Clearing maintains rigorous compliance and reporting systems to meet all statutory requirements.
94. Must Velocity Clearing track the source of each contribution?
Yes. Velocity Clearing identifies contributions as pilot or qualified general contributions, qualified rollover contributions, section 128 employer contributions, or other contributions in order to comply with reporting and limit enforcement. CleverAlpha's platform facilitates this tracking automatically.
95. Who can serve as trustee for a Trump Account?
A bank (as defined in section 408(n)) or a non-bank trustee approved by the IRS for IRAs. Velocity Clearing, LLC is an IRS-approved nonbank trustee for IRAs and is automatically approved to serve as trustee for Trump Accounts.
96. Does Velocity Clearing need to notify the IRS that it is offering Trump Accounts?
Yes. An approved nonbank trustee must notify the IRS in writing of changes affecting prior representations, and becoming a Trump Account trustee is treated as such a change. Velocity Clearing has complied with this requirement.
97. What must the Trump Account governing instrument include?
It must: (1) designate the account as a Trump Account, (2) incorporate IRA requirements under section 408(a)(1)–(6), and (3) include Trump-specific requirements under section 530A(b)(1)(C) concerning contributions, distributions, and eligible investments. Velocity Clearing's governing instruments are compliant with all statutory requirements.
98. Can the governing instrument include special auto-transfer provisions at the end of the growth period?
Yes. It may provide for automatic transfer of assets to a non-Trump traditional IRA at Velocity Clearing immediately after the growth period, in which case it need not include detailed post-growth-period rules for the Trump Account itself. CleverAlpha will offer this option based on client preference.
99. Are Trump Accounts subject to ERISA?
Trump Accounts for children are generally not employer-sponsored retirement plans. Employer contribution programs under section 128 are intended to be structured so they are not subject to the ERISA coverage framework; further Labor and Treasury guidance is anticipated.
100. Where can I get official Trump Account information and contact CleverAlpha for help?
Official resources: trumpaccounts.gov, IRS.gov/trumpaccounts, IRS Notice 2025-68, Form 4547, and the statutory text in sections 530A, 6434, and 128. For enrollment assistance and account management support, visit CleverAlpha.com/trump-accounts, email support@cleveralpha.com, or call (310) 293-7837.
