The Department of the Treasury and IRS recently issued new guidance (Notice 2025-68) on Trump Accounts, a brand-new type of IRA designed specifically for children under the Working Families Tax Cuts. With regulations still forthcoming, many parents, entrepreneurs, and high-income households are already asking us:
“Should I open a Trump Account for my child?”
“How will it interact with my current tax strategy?”
“Can my business contribute to employees’ Trump Accounts?”
At Velin & Associates, we reviewed the IRS notice thoroughly so we can explain how these accounts work, who benefits, and how our clients—creators, medical professionals, e-commerce business owners, and high-net-worth families—can prepare.
What Is a Trump Account?
A Trump Account is a new IRA created for eligible children under age 18. A parent or guardian must make an election to establish it.
Key points:
- Contributions cannot begin before July 4, 2026.
- Each eligible child born between Jan. 1, 2025 and Dec. 31, 2028 receives a one-time $1,000 federal pilot contribution.
- Annual contributions:
- Up to $5,000 total per year (combined from all sources)
- Employers may contribute up to $2,500 of that total—not counted as taxable income to the employee
- Funds must be invested in S&P 500 index funds or other U.S. equity index funds
- Withdrawals cannot begin until January 1 of the year the child turns 18
- After age 18, the account becomes a traditional IRA
How Trump Accounts May Benefit Your Family or Your Business
Because these accounts convert into traditional IRAs when the child becomes an adult, they have long-term wealth-building advantages—especially for families who already prioritize tax strategy.
Below, we illustrate the details with examples from the types of clients we work with at Velin & Associates.
Example 1: A YouTuber / Creator (CPA for YouTubers, CPA for TikTokers)
A successful YouTuber with irregular but high income wants to start generational planning. They have a newborn in 2026, so the child qualifies for the $1,000 federal contribution.
The creator wants to add $5,000 annually and asks us:
“Should I max this out or focus on my SEP IRA first?”
We review:
- Their existing retirement contributions
- Their business structure
- Their projected AGI
- Long-term tax benefits of early compounding
In many cases, we recommend contributing to both—but only after confirming the optimal ordering to minimize tax liability.
Example 2: A Shopify Store Owner or Online Commerce Business (CPA for Shopify Store | CPA for Online Commerce)
A Shopify seller with several employees wants to offer Trump Account contributions as a benefit.
Under the new rules:
- The business can contribute up to $2,500 per employee’s dependent child
- Contributions do not increase taxable wages
We advised one e-commerce client that offering Trump Account contributions could:
- Reduce turnover
- Provide a tax-efficient benefit
- Improve employee retention during busy Q4 seasons
We also structured an internal policy to ensure the business meets IRS requirements for a qualified “class” of beneficiaries.
Example 3: Amazon Seller & Filmmaker Clients (CPA for Amazon Business | CPA for Filmmakers)
A film producer and an Amazon business owner both asked if they can roll over existing IRAs into Trump Accounts.
The IRS notice clarifies:
- Rollovers are allowed, but only under specific conditions
- Funds remain restricted from withdrawal until the child turns 18
We walked each client through:
- Whether early investment makes sense
- Their risk tolerance for U.S. equity-only portfolios
- Long-term family tax planning strategies
Example 4: Doctors & Medical Practices (CPA for Doctors | CPA for Medical Practice | CPA for Dental Practice)
A doctor operating a medical practice wants to open Trump Accounts for three children under 18.
They ask:
“Can I contribute for all three and can my practice contribute too?”
Yes—up to the annual limit.
We structure:
- Personal contributions
- Employer contributions through the medical practice
- Investment selections aligned with their risk profile
This allows high-income professionals to use Trump Accounts as part of a larger retirement and estate strategy.
Example 5: High Net Worth Households (CPA for High Net Worth Individuals)
A high-net-worth family wants to max out contributions for multiple children and also explore charitable contributions.
The notice confirms:
- Certain governmental entities and charities can make “qualified general contributions”
- As long as contributions target a qualified class—not individual children
We help these clients:
- Determine whether charitable contributions can indirectly benefit their children
- Ensure contributions don’t violate aggregation rules
- Coordinate Trump Accounts with existing 529 plans, trusts, and IRAs
Key Technical Details to Know
✔ Contribution Limits
- $5,000 per child per year
- Indexed for inflation starting after 2027
- Employer contributions count toward the limit
✔ Eligible Investments
Must be invested in:
- S&P 500 index funds, or
- Other U.S.-focused equity index funds
✔ Withdrawal Rules
- No withdrawals before January 1 of the year the child turns 18
- After that, treated same as a traditional IRA
- Ordinary income tax on distributions
- Early withdrawal penalties apply before age 59½
✔ IRS Form 4547
A new form used to:
- Establish a Trump Account
- Elect participation in the pilot program
- Authorize the $1,000 federal contribution
The form is currently in draft and expected to be finalized in 2026.
What Parents & Business Owners Should Do Now
Even though contributions cannot start until July 4, 2026, planning starts today.
Velin & Associates can help you:
- Determine if a Trump Account makes sense for your tax strategy
- Compare Trump Accounts with 529 plans, Roth IRAs for minors, or custodial accounts
- Structure employer contribution programs
- Prepare documentation and elections once Form 4547 is final
This program may become a powerful long-term tax planning tool—especially for creators, e-commerce owners, medical professionals, and high-income clients who already rely on us for advanced strategies.
Need Help Planning for Trump Accounts?
We specialize in tax planning for creators, e-commerce sellers, medical practices, and high-net-worth households. For more information about our tax planning services, contact us today: visit our website.
Velin & Associates, Inc
8159 Santa Monica Blvd STE 198/200 West Hollywood, CA 90046
323-902-1000
dmitriy@losangelescpa.org
CPA for YouTubers | CPA for Shopify Store | CPA for Online Commerce | CPA for Creators | Shopify Store CPA | CPA for Filmmakers | CPA for Amazon Business | Amazon Business CPA | CPA for Dental Practice | Dentist CPA | Dental Business CPA | Online Commerce CPA | CPA for TikTokers | CPA for Doctors | CPA for Medical Practice | CPA for High Net Worth Individuals
Hello