The Department of the Treasury and the Internal Revenue Service issued proposed regulations governing eligible investments for Trump Accounts, a new type of traditional individual retirement account created under the Working Families Tax Cuts.
Trump Accounts allow children to invest funds on a tax-deferred basis beginning when an account is first established through December 31 of the year they turn 17. After this growth period ends, investment restrictions no longer apply.
Eligible investments during the growth period are generally limited to mutual funds or exchange-traded funds that track an equity index of primarily U.S. companies, such as the S&P 500, without using leverage, with annual fees and expenses of no more than 0.1 percent of the account balance.
If an account beneficiary does not select an eligible investment, funds are automatically invested in an eligible investment chosen by the trustee.
Frank Bisignano, IRS chief executive, said: "These proposed regulations will provide clarity for trustees and beneficiaries of Trump Accounts, thus encouraging eligible participants to invest in low-fee mutual funds and ETFs that will grow on a tax-deferred basis potentially over their entire lives."
The proposed regulations would apply to tax years beginning January 1, 2026. Parents, guardians, and other authorized individuals can open a Trump Account for a child by completing Form 4547, Trump Account Election, through the IRS Individual Online Account portal before the calendar year in which the child turns 18.
For children who are U.S. citizens born between 2025 and 2028, eligible individuals can elect a $1,000 pilot program contribution to the child's account.
The Treasury and IRS are seeking public comment on the regulations by October 20, 2026.