New tax laws don’t just affect businesses — they can also create powerful planning opportunities for families. One such development is the introduction of §530A accounts, commonly referred to as Trump Accounts, which were established under recent federal legislation.
As the 2025 filing season approaches, parents, guardians, and employers should understand how these accounts work and whether they fit into a broader financial and tax strategy.
At Freedom From Accounting, our role is to help clients navigate new provisions like §530A clearly, objectively, and strategically — without political framing, confusion, or misinformation.
A §530A account is a tax-deferred savings account created for the benefit of a child. It is designed to help build long-term savings during the beneficiary’s early years, with special rules that apply until the child reaches adulthood.
An account may be opened only for an eligible individual, defined as:
The account is opened by an authorized individual, typically a parent or legal guardian, though certain relatives may qualify depending on the situation. The election to establish the account is made through a dedicated IRS form or online portal and may be filed with the authorized individual’s tax return.
Although §530A accounts are technically a form of traditional IRA, they operate under unique rules during the child’s “growth period,” which lasts until the end of the year before the beneficiary turns 18.
During this period:
The goal is to create a stable, low-risk environment for long-term savings rather than short-term access.
Trump Accounts follow a distinct contribution framework, which differs from both traditional and Roth IRAs.
Key contribution points include:
Importantly, no contributions are permitted before July 4, 2026, even if the account is opened earlier.
One of the most notable features of §530A accounts is the potential for non-traditional contributions.
Under a limited pilot program, the U.S. Treasury may contribute $1,000 for qualifying children born within a specific date range. This contribution:
Employers may also participate through newly created §128(c) contribution plans, allowing tax-free employer contributions of up to $2,500 per employee (or their dependents). These contributions:
This creates a potential new fringe benefit strategy for businesses looking to support employees’ families.
Once the beneficiary reaches adulthood, the Trump Account transitions into standard IRA treatment. At that point:
One important distinction remains: Trump Accounts are never aggregated with other IRAs for basis allocation purposes, which can have meaningful tax implications later in life.
New tax provisions often come with confusion — especially when they carry politically charged names. Regardless of labeling, §530A accounts are a legitimate planning tool that families and employers should evaluate based on financial merit, not perception.
For some families, these accounts may complement existing education or retirement strategies. For others, they may not be appropriate at all. The key is informed decision-making.
At Freedom From Accounting, we help clients:
If you have children, employ parents, or are planning ahead for future financial flexibility, now is the time to understand how §530A accounts fit into the bigger picture.
👉 Schedule a planning conversation with our team:
https://tidycal.com/ffa/45-minutediscoverycall
