(NEXSTAR) – Parents can soon look forward to the introduction of “Trump accounts” for children, expected to be available in the coming months. These savings accounts are designed to help children manage future expenses, and parents can initiate the setup process as they file their taxes.

Launched under last year’s One Big Beautiful Bill Act, these accounts function similarly to retirement accounts. They allow contributions from parents, employers, and other parties, which are then invested to grow until the child reaches the age of 18. At that point, the funds become available for specific types of expenses.

Here’s a closer look at what these Trump accounts entail and what families can anticipate as they are rolled out.

Who is eligible for Trump accounts?

To qualify for a Trump account, any child in the U.S. must be under 18 and possess a Social Security number. Parents or guardians will need to provide personal details, including their name, Social Security number, and address, to register as the “responsible party” for managing the Trump account.

The initial seed money that each child’s account receives will vary according to the child’s age, affecting the initial balance and potential growth of the savings.

How are Trump accounts funded and managed?

As mentioned above, Trump accounts will be treated much like retirement accounts.

There are four methods by which funds can be added to the account: federal seed funds, donations from adults in the child’s life, donations from “wealthy Americans” and philanthropic efforts, and contributions from state governments.

Children who are born between January 1, 2025, and December 31, 2028, are eligible to receive $1,000 in seed money from the Treasury Department under an optional pilot program. If your child is under the age of 10, but too old to qualify for that contribution, they may qualify for a one-time payment of $250. Connecticut children who meet certain restrictions may receive an additional $250.

Contributions from friends, family members, and other adults will be capped annually at $5,000. Employers can contribute up to $2,500 annually to the account of an employee’s child, though it will count against the $5,000 limit, the IRS explains. These caps will adjust annually based on inflation.

Contributions from governmental entities and charities do not count toward the cap.

The first contribution to “Trump accounts” cannot be made until after July 4.

How big could the accounts get?

It will likely vary by account.

Treasury Secretary Scott Bessent previously said that, should the S&P 500 continue its annual growth rate of 10.5%, the Treasury’s one-time deposit of $1,000 into the Trump account could turn into roughly $600,000 by the time the child reaches retirement age.

He pointed to an analysis by the Council of Economic Advisers, which suggested the account of a child born in 2026 could be worth more than $300,000 by the time they turn 18 if the maximum annual contributions are made. By 28, the account could be worth more than $1 million, under a high-yield scenario.

The IRS explains that the “growth period” for the accounts will end on December 31 of the year before the child turns 18. Investment yields and contribution size will impact the outcome of each account.

What can funds be used for?

Unlike 529 accounts, another savings account you can establish for your child, the money that accrues in a Trump account can be used for more than education costs. Once your child turns 18, they can withdraw funds to purchase a house, start a business, or pay for schooling.

There may be additional tax on early distributions from the account, and the IRS notes that there may be exceptions, “such as for distributions for higher education expenses or first home purchases.”

How do you register a child for a Trump account?

An online portal in which you can register your child for a Trump account is expected to open this summer.

In the meantime, however, you can register via your 2025 tax filing. According to the IRS, you will need to fill out Form 4547 (a nod to Trump being the 45th and 47th president of the U.S.).

You’ll need your information, as well as your child’s – or children, if you’re registering more than one. You will also be asked if you would like to receive the optional $1,000 seed money from the Treasury, should your child qualify.

More details about Form 4547 can be found here.

When will Trump accounts be available?

As mentioned above, you can register your child or children for an account as you file your taxes this year.

Officials previously announced that, come May, parents who sign up will get information about how to finish opening the accounts. Beginning in July, the White House says it will have a website where parents can register for the accounts.

Trump accounts officially launch on July 5, 2026.