Trump Accounts for Expat Families: New Retirement Savings for Kids Under 18
The IRS has announced details about Trump accounts, a new type of retirement account that American parents can open for their children starting July 4, 2026.
Trump accounts are traditional IRAs specifically designed for children under 18. Created by the One, Big, Beautiful Bill Act signed on July 4, 2025, these accounts allow families to start building retirement savings for children from birth through age 17.
For Americans living abroad, Trump accounts offer a way to create long-term financial security for children, with special government contributions available for eligible kids born between 2025 and 2028.
Here’s what expat families need to know. Full details are available in IRS Notice 2025-68.
What Is a Trump Account?
A Trump account is a special type of traditional individual retirement account for children under 18. Created under Section 530A of the One Big Beautiful Bill Act, these accounts function like standard traditional IRAs with some important differences during what the IRS calls the “growth period” (before the child turns 18).
Think of it as giving your child a head start on retirement savings. The account begins with government or family contributions that grow tax-deferred, then automatically transitions to a regular traditional IRA when your child turns 18.
Learn more about moving retirement accounts overseas
Who Can Open a Trump Account?
Your child qualifies for a Trump account if they meet these requirements:
- Have a valid Social Security number
- Are under age 18 before the end of the calendar year when you open the account
- Are a U.S. citizen (for pilot program eligibility)
The following people can open an account for an eligible child, in order of priority:
- Legal guardian (if one exists)
- Parent (either parent if no guardian)
- Adult sibling
- Grandparent
Curious how Trump accounts will work for your expat family?
The $1,000 Pilot Program
If your child was born between January 1, 2025, and December 31, 2028, and is a U.S. citizen, the federal government will deposit $1,000 into their Trump account. This one-time contribution doesn’t count toward annual contribution limits.
To receive this $1,000 deposit, you’ll need to make two elections simultaneously: one to open the account and another to receive the pilot program contribution. You can make both elections using Form 4547 (once released) or through an online tool launching in mid-2026.
How Much Can You Contribute?
During the growth period (before your child turns 18), different contribution types have different limits:
| Contribution Type | Annual Limit |
|---|---|
| Pilot program (one-time) | $1,000 (for children born 2025-2028) |
| Employer contributions | $2,500 per employee |
| Other contributions (parents, family, etc.) | $5,000 aggregate |
| Qualified general contributions (states, organizations, tribal governments) | No limit |
| Rollover contributions | No limit |
The $5,000 limit includes employer contributions but excludes pilot program contributions, qualified general contributions, and rollovers. All limits are indexed for inflation starting after 2027.
Important: Unlike standard IRA contributions, your child doesn’t need earned income to contribute during the growth period. However, contributions cannot be made before July 4, 2026.
Investment Rules During the Growth Period
Trump account funds must be invested in eligible investments only. These include:
Allowed investments:
- Mutual funds that track qualified indexes (like the S&P 500)
- Exchange-traded funds (ETFs) that track qualified indexes
- Indexes of primarily U.S. companies
- Funds with annual fees and expenses under 0.1% of the fund balance
- Funds that don’t use leverage
Not allowed:
- Individual stocks
- Money market funds
- Cash (except temporarily while moving between investments)
- Sector-specific or industry-specific funds
- Foreign company-focused indexes
After your child turns 18, standard IRA investment rules apply, and they can invest in any IRA-eligible investment.
Join our expat tax newsletter for clear, timely updates as the IRS releases new guidance, key deadlines, and next steps for parents abroad.
When Can Money Be Withdrawn?
During the growth period, distributions are not permitted except in these specific cases:
- Transfer to another Trump account (entire balance only)
- Rollover to an ABLE account (in the year the child turns 17 only)
- Return of excess contributions
- Distribution upon death
Once your child turns 18 (starting January 1 of the calendar year they turn 18), the account becomes a regular traditional IRA. At that point, they can take distributions for any reason, though standard IRA rules apply, including:
- Distributions are taxed as ordinary income (except for amounts attributable to basis)
- 10% early distribution penalty before age 59½ (unless an exception applies, such as for qualified education expenses or first-time home purchases)
Opening a Trump Account From Abroad
American families living overseas can open Trump accounts for their eligible children using the same process as families in the U.S. Here’s how it works:
- Make sure your child has a valid Social Security number
- Complete Form 4547 (once released) or use the online tool at trumpaccounts.gov (launching mid-2026)
- Make both elections simultaneously if your child qualifies for the pilot program
- Wait for the IRS to send activation information (starting May 2026)
- Complete the authentication process to finalize the account opening
The IRS will create the initial Trump account and select the trustee. As the parent or guardian, you’ll become the “responsible party” for the account, meaning you can select among eligible investments and manage the account on your child’s behalf.
Special considerations for expats:
- Foreign-born children of U.S. citizens qualify as long as they’re U.S. citizens with Social Security numbers
- Dual citizenship doesn’t affect eligibility
- You can manage the account from anywhere in the world
- Trump accounts are considered owned by the child, though you may have FBAR reporting obligations if your combined foreign accounts exceed $10,000
Learn more about FBAR requirements
What Happens When Your Child Turns 18?
On January 1 of the calendar year your child turns 18, the growth period ends, and the Trump account automatically becomes subject to regular traditional IRA rules. This means:
- Your child gains full control of the account
- They can contribute to it if they have earned income (subject to annual IRA limits)
- Standard traditional IRA contribution rules apply going forward
- They can take distributions (though early withdrawal penalties may apply before age 59½)
- Required minimum distributions will eventually apply after age 73
- The account can be rolled over to other IRAs or eligible retirement plans
The account remains a Trump account (it doesn’t convert to a different type of IRA), but nearly all special Trump account rules stop applying.
Tax Treatment of Trump Accounts
During the growth period:
- Contributions are not included in your child’s income when made
- Pilot program contributions and qualified general contributions don’t create basis
- Contributions from parents and other sources create basis in the account
- Earnings grow tax-deferred
After the growth period:
- Distributions are taxed like traditional IRA distributions
- Amounts attributable to basis are not taxed
- Earnings are included in gross income when distributed
- 10% early distribution penalty may apply before age 59½ (unless an exception applies)
Can Employers Contribute?
Yes, under Section 128 employer contribution programs. An employer can contribute up to $2,500 per year to a Trump account for an employee or the employee’s dependent. These contributions:
- Are not included in the employee’s taxable income
- Count toward the $5,000 annual aggregate limit
- Must be made through a qualified Trump account contribution program
- Are indexed for inflation starting after 2027
Foreign employers typically cannot participate in Section 128 programs, as these programs must meet specific U.S. tax code requirements.
Frequently Asked Questions
Can expats open Trump accounts for their children?
Yes. American citizens living abroad can open Trump accounts for their eligible U.S. citizen children with Social Security numbers, regardless of where the family lives.
What’s the deadline to apply for the $1,000 pilot program?
Children born between January 1, 2025, and December 31, 2028, can receive the $1,000 contribution. You can make the election at any time before your child turns 18, though you cannot open the account or receive contributions before July 4, 2026.
Can I contribute to both a Trump account and a regular IRA for my child?
Yes. During the growth period, you can contribute to both a Trump account (up to $5,000 per year from non-exempt sources) and a traditional or Roth IRA for your child (if they have earned income). The contribution limits are separate.
Does my child need to have income to contribute?
No, not during the growth period. Contributions can be made to Trump accounts even if your child has no earned income. However, after age 18, standard IRA contribution rules apply, and your child will need earned income to make contributions.
Can other family members contribute to my child’s Trump account?
Yes. Parents, grandparents, and anyone else can contribute to a Trump account, subject to the $5,000 aggregate annual limit for non-exempt contributions.
What if we move back to the U.S.?
Moving back to the U.S. doesn’t affect the Trump account. You can continue managing it normally, and your child will still have full access when they turn 18.
Can I close a Trump account before my child turns 18?
No. During the growth period, you cannot close a Trump account or take distributions except in very limited circumstances (transferring the entire balance to another Trump account, rolling to an ABLE account when your child turns 17, returning excess contributions, or upon death).
Do Trump accounts need to be reported on FBAR?
Technically, Trump accounts are owned by the child, not the parent. However, if your child has a Trump account and other foreign accounts that combined exceed $10,000, FBAR reporting may be required. Consult with an expat tax professional about your specific situation.
Bottom Line for Americans Abroad
Trump accounts give American families living overseas a new tool to build tax-advantaged retirement savings for their children. If your child was born between 2025 and 2028, you can take advantage of the $1,000 government contribution to jump-start their account.
The accounts open July 4, 2026, and you’ll be able to apply using Form 4547 or through an online tool launching mid-2026. Whether you’re planning to return to the U.S. or stay abroad long-term, these accounts can help secure your child’s financial future.
Full details are available in IRS Notice 2025-68.
No matter how late, messy, or complex your expat tax situation may be, we can help. You’ll have peace of mind knowing that your taxes were done right.
If you’re ready to be matched with a Greenback accountant, click the get started button below. For general questions on expat taxes or working with Greenback, contact our Customer Champions.
You do not have to figure Trump accounts out alone.
This article is for informational purposes only and does not constitute legal or tax advice. Tax laws are complex and subject to frequent changes. Always consult with a qualified tax professional before making decisions about Trump accounts or retirement planning for your children.
