Key features of 530A Accounts

• Children who:
  • Are under age 18 at the end of the calendar year in which the account is established.
  • Have a valid Social Security number.
• Only one Trump Account may be established per child.

An authorized individual may establish a Trump Account by submitting IRS Form 4547 (Trump Account Election(s)). The form may be submitted:

• Through the IRS online Trump Accounts portal
• Through the IRS Individual Online Account system
• With certain tax filing software
• By other IRS-approved methods as they become available

For purposes of opening an account (without regard to the $1,000 pilot contribution), the IRS recognizes the following order of priority:

1. Legal guardian
2. Parent
3. Adult sibling
4. Grandparent

If a higher-priority individual exists and is available, a lower-priority individual generally may not establish the account.

Eligible children born between January 1, 2025, and December 31, 2028, may receive a one-time $1,000 pilot program contribution from the U.S. Treasury.

To qualify, the child generally must:

• Be a U.S. citizen
• Have a valid Social Security number
• Have a Trump Account properly established on their behalf

The $1,000 contribution does not count toward the annual contribution limit.

Contributions may generally come from:

• Parents or legal guardians
• Grandparents and other family members
• Friends and other individuals
• Employers (through eligible programs)
• The child themselves

Earned income is not required for contributions during the growth period.

Government Seed Contribution

• The $1,000 pilot program contribution is not taxable when deposited.
• It does not count toward annual contribution limits.

Taxation of Withdrawals

After the growth period ends, Trump Accounts generally operate under rules similar to a Traditional IRA.

Important considerations:

• Growth is tax-deferred.
• Most withdrawals are taxable as ordinary income.
• Family and friend contributions are made with after-tax dollars and create basis that should not be taxed again upon withdrawal.

Basis Tracking

A potentially important planning issue:

• Custodians may not track after-tax basis once the account converts to a traditional IRA.
• Account owners should maintain records of after-tax contributions.
• IRS Form 8606 may be necessary to preserve basis and prevent double taxation.
• Example: If parents contribute $4,000 and the government contributes $1,000, and the account grows to $40,000, then approximately $4,000 may be withdrawn tax-free as basis, while the remaining $36,000 would generally be taxable as ordinary income. Withdrawals before age 59½ generally trigger ordinary income taxes plus a 10% penalty unless an exception applies. Illustrative example only.
• Key Compliance Caution
  • The least understood planning issue may be basis tracking. Unlike Roth IRA contributions, after-tax contributions to Trump Accounts may require long-term recordkeeping to ensure they are not taxed twice when distributed decades later. Maintaining contribution records and consulting a qualified tax professional may be critical.

Early Withdrawal Rules

During the growth period (before age 18), withdrawals are generally prohibited except for:

• Trustee-to-trustee rollovers to another Trump Account
• Rollovers to an ABLE account (subject to statutory requirements)
• Correction of excess contributions
• Death of the beneficiary

Penalty Exceptions After Age 18

The account generally follows Traditional IRA withdrawal rules.

• Higher Education Expenses
  • Qualified higher education expenses
  • No fixed dollar cap, but limited to actual qualified expenses
• First-Time Home Purchase
  • Lifetime limit of $10,000
• Medical Expenses
  • Income tax may still apply even when the 10% penalty is waived.
  • Unreimbursed medical expenses exceeding 7.5% of adjusted gross income (AGI)

During the growth period, investments are restricted to low-cost, broadly diversified U.S. equity index funds and ETFs.

• Current Default Investment
  • State Street SPDR Portfolio S&P 500 ETF (SPYM)
• Additional Investments Expected to Be Available
  • iShares Core S&P 500 ETF (IVV)
  • Vanguard Total Stock Market ETF (VTI)
  • SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM)
  • iShares Core S&P Total U.S. Stock Market ETF (ITOT)
• Expense Ratios
  • Available investment options are subject to a maximum expense ratio of 0.10%.
  • Until expanded allocation functionality is fully implemented, contributions are invested in the default fund.

Upon reaching age 18:

• The child gains full control of the account.
• The special Trump Account restrictions generally cease.
• The account remains in place but begins operating under rules substantially similar to those governing Traditional IRAs.

The account does not need to be moved to a different custodian.