Is the $1,000 Government Seed Money for Trump Accounts Worth Claiming?

There’s a new government benefit for children born in 2025 or later. I’m talking about the Trump Accounts that were established in last year’s One Big Beautiful Bill Act.

These are tax-advantaged savings accounts for children under 18, though only children who are U.S. citizens are eligible. If your child was born in 2025 or later, they’re also eligible for a $1,000 government-seeded contribution to the account.

Is this benefit legitimate and worth claiming? Absolutely!

Despite the name, the initial investment into your child’s account comes not from the president, but from the American people. It’s basically a tax-advantaged individual retirement account (IRA) designed specifically for children. If you pay federal income taxes, you, too, are funding these accounts, so you should help your child claim their share.

Image source: Getty Images.

Opening an account and claiming the seed investment couldn’t be easier

How do new parents go about claiming the money? It’s easy. You just need to gather a bit of information:

• Your child’s date of birth
• Your contact information
• Social Security numbers for you and your child

Then pull up Form 4547 and fill in the form with that information. It’s very simple and straightforward, so those who hate paperwork (like I do) don’t need to be anxious about it. In addition, you can add multiple children on the same web page. It’s all done online, so there’s no printing out forms or faxing.

After that, you’ll be contacted by a trustee with whom your Trump Account will be established. They will provide further instructions about how to complete the account setup.

Once you’ve successfully opened the account, you (as a parent), other adults, or employers can contribute up to a combined $5,000 a year per child in 2026 and 2027. Those funds will be invested by the trustee in relatively safe index funds, like those that track the entire S&P 500 index of large-cap U.S.-listed companies.

Your child can withdraw funds from the account once they turn 18, though the same contribution and withdrawal rules that govern traditional IRAs apply to these accounts.

This is money every new parent can and should claim. It will help your child enter adulthood with a bit more financial security – and perhaps even some early knowledge about saving and investing.

Don’t delay opening this account. You can find more details on them by reading The Motley Fool’s Trump Accounts guide.