The Trump Account May Be Better Than Originally Thought

We are starting to think that Trump Accounts may be very effective for farmers with young kids

Photo by David Wirzba on Unsplash

The One Big Beautiful Bill Act introduced Trump Accounts. This is a special type of account that is only allowed for children under age 18. For children born in 2025-2028, the government will actually fund these accounts with a $1,000 stipend.

You are unable to open a Trump Account before July 4, 2026, and here are some of the key details:

• You are able to contribute up to $5,000 into a Trump Account and this amount will be indexed beginning in 2028.

• An employer may contribute up to $2,500 as part of the $5,000 limit. This contribution is not income to the employee. Self-employed farmers are not considered an “employer” for purposes of this rule, therefore, they are not allowed the $2,500 deduction.

• Certain non-profits and governmental agencies can also contribute to the account, and those amounts would be on top of the $5,000 limit.

• The contribution is not deductible by the parents.

• The account can only invest in inexpensive indexed mutual funds or ETFs with expense fees of less than .1% and must be invested in a broad array of stocks such as an S&P Fund.

• Once the child reaches age 18, the Trump Account becomes a regular IRA and will be subject to the normal IRA restrictions.

So why might the Trump Account be a consideration for a farm family.