The Internal Revenue Service (IRS) on Tuesday released initial details regarding the new Trump Accounts, which are individual retirement accounts (IRAs) established for eligible children under H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act. These accounts include a $1,000 contribution from the federal government.

IRS Guidance and Next Steps

In Notice 2025-68, the IRS provided information concerning the process for creating these accounts, details on the $1,000 pilot program contribution, guidelines for other types of contributions, and an explanation of how the Sec. 530A Trump Accounts differ from existing IRA types.

The IRS clarified that the notice offers a general overview rather than comprehensive guidance, adding that it plans to propose official regulations in the future. Additionally, the IRS released a draft of Form 4547, Trump Account Election(s). A news release from the agency stated that taxpayers will use the final version of this form to both establish an account and enroll in the pilot program.

The Dell’s Philanthropic Contribution

Also announced on Tuesday, billionaires Michael and Susan Dell pledged $6.25 billion to support children not eligible for the government’s $1,000 pilot program. This donation will provide $250 each to start accounts for 25 million American children up to age 10. According to interviews with Michael Dell, these children must reside in ZIP codes with a median income below $150,000.

Michael Dell, the founder and CEO of Dell Technologies, commented on the initiative, stating, “We believe that if every child can see a future worth saving for, this program will build something far greater than an account. It will build hope and opportunity and prosperity for generations to come.”

The use of ZIP code designation is permissible under H.R. 1, which authorizes state, local, tribal governments, and charitable organizations to make “general funding contributions”, those made to a specified qualified class of Trump Account beneficiaries. Qualified classes include beneficiaries under the age of 18, and the general funding contribution can specify geographical areas or specific birth years for the recipients.

Key Details on Trump Accounts

H.R. 1 mandates the establishment of a Trump Account for every eligible child for whom an election is made, typically by a parent or guardian, and who has not reached age 18 before the end of the calendar year of the election. The law also permits the Treasury to set up accounts for individuals it identifies as eligible where no account has yet been created.

• Contribution Start Date: Contributions to the accounts may begin on July 4, 2026.
• Government Pilot Contribution: Under Sec. 6434, the government will make a one-time $1,000 pilot program contribution to the Trump Account of each eligible child who is a U.S. citizen and who is born on or after January 1, 2025, through December 31, 2028, provided an election is made.
• Employer Contributions: New Sec. 128, established in H.R. 1, allows employers to contribute up to $2,500 per year to the Trump Account of an employee or an employee’s dependent. This contribution is excluded from the employee’s taxable income. The annual contribution limits are indexed for inflation and will begin adjusting after 2027.
• Withdrawals and Account Treatment: Amounts generally cannot be withdrawn from Trump Accounts before January 1 of the calendar year in which the child turns 18. Thereafter, the account is generally treated as a traditional IRA and is subject to the same rules as other traditional IRAs.
• Eligible Investments: Investments permitted in Trump Accounts will generally include mutual funds and indexed Exchange-Traded Funds (ETFs).