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The IRS has released draft Form 4547 (PDF - 311 KB), Trump Account Election(s), and draft instructions (PDF - 311 KB) that advance implementation of a new tax-favored child savings account created under the One Big Beautiful Bill Act (OBBBA). Trump accounts, also known as 530A accounts, will be established in 2026, and a pilot program will apply to each qualifying child born in 2025–28. However, no contributions can be made until July 4, 2026.
These new accounts will function like traditional individual retirement accounts (IRAs) for eligible minors and are generally subject to an aggregate annual contribution limit of $5,000, subject to a cost-of-living adjustment after 2027. In addition, each qualifying child born after Dec. 31, 2024, and before Jan. 1, 2029, is eligible to receive a one-time $1,000 federal contribution to a Trump account, which does not count against the aggregate annual limit. Along with recent IRS guidance(Notice 2025-68), the new materials provide employers with early insight into how account elections, contributions and future reporting are expected to operate.
Generally, Form 4547 will be completed by a parent or other authorized individual to establish an account for an eligible child and, where applicable, to request a Treasury-funded pilot contribution for those born during calendar years 2025 through 2028. For this purpose, the instructions define “authorized individual” as a legal guardian, parent, adult sibling or grandparent of the child, in that order of priority.
Grant Thornton insight:
It appears that employers may not currently be able to complete this form, but this could change as more guidance is released.
In addition to explaining who may open an account, the instructions also detail how the account is activated and the restrictions that apply generally until an eligible child turns 18, including limitations on investments, distributions and annual contributions. The guidance also confirms that these accounts may receive contributions from multiple sources, including employer contributions permitted under new Section 128.
The draft instructions also address an important distinction that will affect future taxation: Certain contributions will not create basis in the account. This includes Treasury pilot contributions, qualified government or charitable contributions, and employer contributions under Section 128. Other contributions, such as those made by parents or the child, do create basis, and rollover contributions carry over their existing basis. This distinction will be relevant once distributions are permitted and traditional IRA-style tax rules begin to apply, underscoring the importance of accurate contribution tracking by account trustees and other payors.
Grant Thornton insight:
From an employer perspective, the release of Form 4547 and its instructions signals that these child savings accounts are moving closer to operational implementation and that employer participation is explicitly contemplated. Employers can anticipate employees asking HR and benefits teams about eligibility, employer-funded contributions and how these accounts interact with existing dependent benefit programs.
Employers should monitor forthcoming proposed regulations, coordinate with benefit providers and evaluate whether offering employer contributions under Section 128 aligns with their broader workforce and family benefits strategy.
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