Nearly 70 Million Kids Have Trump Accounts, but Parents Must Claim the $1,000
More than $4.5 billion has flowed into Trump Accounts since the program launched July 4, but only about 164,000 of 60 million auto-enrolled accounts were claimed in the first week, Bloomberg Law reported.
Treasury opened those accounts on Oct. 1, bringing the total to about 70 million. Helen Morrison, Treasury’s benefits tax counsel, gave the figure at an American Bar Association tax meeting, speaking personally.
Morrison said $1.3 billion of the money came from the federal $1,000 contributions, more than $600 million from family and friends, and about $2.6 billion from philanthropists including Michael and Susan Dell and Ray Dalio.
She said Treasury estimates about 80% of the accounts belong to families earning less than $200,000 a year, and benefits attorneys said getting parents to claim accounts will be key to the program’s success.
The White House says every child under 18 with a Social Security number now has an account. Parents must still claim it through the official Trump Accounts app before managing it or adding money.
Two Steps for the $1,000
The $1,000 deposit requires a separate step. The IRS says parents must file Form 4547 and elect the pilot contribution, even when Treasury opened the account automatically, for citizen children born from 2025 through 2028.
The form can be filed through the app, the Trump Accounts website or an IRS online account. The agency advises making sure a child’s information matches Social Security Administration records to avoid delays.
Social Security began adding a Trump Account insert to cards mailed to newborns through its Enumeration at Birth program on Oct. 20, Newsweek reported. The insert explains how to claim the account and the $1,000.
Family and friends can contribute up to $5,000 a year per child, and employers can give up to $2,500 of that total. Withdrawals generally are not allowed until the year the child turns 18.
The money goes into low-cost index funds. Treasury chose the State Street SPDR Portfolio S&P 500 ETF as the default option, and fund expense ratios are capped by law at 0.1%, Fox Business reported.
New rules also allow donated individual stocks, which generally must be held five years. “We do have mega donors in the nine-digit range,” IRS CEO Frank Bisignano told CNBC.
“If a child qualifies for that $1,000 contribution, that’s free money essentially,” said Charissa Anderson of Ferguson Wellman Capital Management. Advisers also point families to 529 plans, which allow tax-free withdrawals for education.
After age 18, the account is generally treated like a traditional individual retirement account. Families with questions can call the Trump Accounts help line at 866-USA-4547 or visit trumpaccounts.gov.
“With automatic enrollment now complete, every American child under the age of 18 has a Trump Account in their name, making it easier than ever for families to participate,” White House spokeswoman Taylor Rogers said.
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