Advisors Split Over Recommending New Trump Accounts

Section 530A accounts, commonly called ‘Trump’ accounts, will accept contributions beginning July 4. The U.S. Treasury will deposit $1,000 into each eligible account for U.S. children born between Jan. 1, 2025, and Dec. 31, 2028. The accounts are structured as individual retirement accounts with tax-deferred earnings and an option to convert funds to Roth IRAs when the child reaches the age of majority. The IRS and Treasury issued guidance on June 29 stating contributions qualify for a safe harbor from gift tax reporting. The Bank of New York Mellon and Robinhood were selected to run program operations, and some employers have said they will match the $1,000 government contribution.

Advisors are divided over recommending the accounts. One set of advisors highlights the $1,000 deposit and tax-deferred growth as the main benefits. Miklos Ringbauer, founder of MiklosCPA, described the loss of parental control at age 18 as comparable to handing a young adult their own checking account and pointed to the value of compounding plus the government deposit. He recommended opening accounts for eligible children to claim the $1,000 even if families later favor other savings vehicles.

Other advisors emphasized concerns about control and tax treatment. Ryan McKeown, a CPA and CFP and senior vice president at Wealth Enhancement Group, pointed out that account holders gain full access at 18, while 529 plans allow parents or grandparents to retain control and change beneficiaries. He noted that distributions used for education would generally be taxable to the child and could trigger the kiddie tax for students aged 18 to 24, which can tax unearned income at the parents’ rate.

Advisors reporting client interest said the $1,000 incentive is motivating a range of households. David R. Silversmith, senior manager of private client services at Eisner Advisory Group, reported only a few clients had requested Trump accounts early on and that many were primarily interested in the government contribution, including some high-income clients. The IRS and Treasury safe-harbor guidance means contributions to these accounts do not reduce a donor’s available gift tax exclusion.

Practical program limits may affect choices. The combined contribution limit for 2026 is $5,000, with annual inflation adjustments starting after 2027. Guidance and practitioner reports say excess contributions will be redirected to a supplemental taxable custodial account. Ben Henry-Moreland of Kitces.com cautioned advisors to calculate contributions carefully to avoid creating additional accounts to manage.

Advisors comparing options note differences with 529 plans. Qualified education withdrawals from 529s are tax-free, and some states offer income tax deductions or credits for 529 contributions. Parents and grandparents can retain control of 529 accounts and change beneficiaries, features that influence client decisions. Several advisors recommended that families who qualify consider opening a Trump account to secure the $1,000 deposit while continuing to evaluate 529s and other savings vehicles.

Children born outside the 2025–2028 eligibility window are not eligible for the Treasury contribution. Advisors continue to weigh the accounts’ access rules, tax consequences, employer matches and administrative details when advising clients.