Treasury creates Trump Accounts for 60 million children, but employer money still depends on parents

The Treasury Department said on October 1 that it had finished automatically opening Trump Accounts for every eligible child under 18 with a valid Social Security number, creating accounts for more than 60 million children in a matter of days. The accounts exist. Much of the money they were built to receive still depends on parents showing up.

Under Treasury's announcement, a parent or guardian must claim the account before family members, friends or employers can contribute, and before an eligible child can receive the government's one-time $1,000 seed deposit. Claiming runs through the official Trump Accounts app for iOS and Android. A parent verifies their identity and relationship to the child, reviews the child's information and accepts the account terms, Treasury said. The $1,000 seed applies to children born from 2025 through 2028.

The scale changed quickly. About 7 million to 8 million children had been signed up as of mid-September, when families had to opt in by filing IRS Form 4547 with a tax return or through TrumpAccounts.gov, Treasury Secretary Scott Bessent told the House Financial Services Committee. "We anticipate within a month we will have 70 million because we will go to auto-enroll," he said at the September 15 hearing, CNBC reported. The temporary regulations behind the change estimate it could add more than 60 million children in 2026 and about 2 million accounts a year after that, according to CNBC's reading of the guidance.

The rules create two routes into an account, and they behave differently. A qualified general contribution, which the temporary regulations published September 30 describe as a deposit made by the Secretary and funded by a state or local government, the United States, the District of Columbia, a tribal government or a 501(c)(3) tax-exempt organization, must go in equal amounts to every account in a defined class of children and is not counted as the child's income. Those deposits can land in an unclaimed account.

"This means that children won't miss out on philanthropic gifts, like money from the Dells, or growth on those gifts, even if an account has not been activated for them," Madeline Brown, senior policy associate at the Urban Institute, told CNBC. Michael and Susan Dell have committed $6.25 billion to add $250 for children born between 2016 and 2024 who live in ZIP codes where the median income is $150,000 or less, CNBC reported.

Employer money follows the other route: direct contributions to an account a parent has claimed.

The new rules also open the door to stock. The temporary regulations allow qualified stock contributions, including individual shares, a change from earlier guidance that limited holdings to diversified, low-cost funds; donated stock generally must be held for five years before it is sold, CNBC reported. "Wealthy founders and shareholders have been pushing to donate stock directly" to avoid the capital gains taxes triggered by selling shares and gifting cash, said Ben Henry-Moreland, a certified financial planner with Kitces.com.

Parents' willingness to claim the accounts is still largely untested. Before auto-enrollment, just 5% of low- and moderate-income families, defined as those earning up to $80,000 a year, had opened an account, according to a survey by the nonprofit Commonwealth of nearly 1,100 such parents of children 10 and under, fielded in July with a margin of error of plus or minus 3%. Respondents cited worries about tax consequences, effects on public benefits and an inability to contribute.

Commonwealth projects that about 14.4 million children born from 2025 through 2028 will qualify for the seed, 5.8 million of them in low- and moderate-income households. Applying historical takeup rates for the earned income tax credit, it estimates 20% of eligible babies may never claim the $1,000, leaving about $2.88 billion unclaimed by lower-income children during the pilot.

The investment plumbing sits with a bank and Treasury. Treasury designated Bank of New York Mellon as trustee of a master trust that pools and invests the automatic accounts, while Treasury itself picks the default investment and controls eligibility and contribution decisions, according to a September 30 statement from SEC staff, who said they would not recommend enforcement action against the structure. By statute, eligible investments are index-tracking mutual funds or ETFs with no leverage and annual costs of no more than 0.1%.

The IRS has added Joseph Velli, a former Bank of New York and Convergex Group executive, as a senior adviser on the program to Frank Bisignano, who runs both the IRS and the Social Security Administration. Omeed Firouzi, who directs the low-income taxpayer clinic at Temple University's Beasley School of Law, pointed to recent IRS budget and staffing cuts: "I wonder if they have the ability to effectively do this."

The rules governing all of it are temporary. They took effect September 30, and Treasury and the IRS are taking comments on the matching proposed regulations through November 30, 2026.