A recent FEDZONE column (Getting Ready for the Start of Trump Accounts in July 2026) discussed Trump Accounts which are expected to start on July 4,2026. Trump Accounts were created under provisions of the One Big Beautiful Bill Act of 2025 (OBBBA). A Trump Account is a traditional IRA established for a child under age 18. The child for whom the account is opened is the beneficiary and the legal owner of the account. Trump Accounts are designed to help families start saving and investing for their children’s future when their children are young.
The IRS recently issued proposed regulations detailing the rules for establishing Trump Accounts. One rule is that there can be only one Trump Account per child. Additionally, the proposed regulations set out two rules as to who can establish a Trump Account on behalf of a child. According to the proposed regulations, only a parent, a legal guardian or an “authorized” individual can establish a Trump Account on behalf of a child. What about a grandparent who would like to establish a Trump Account for a grandchild? Is a grandparent considered to be an “authorized” individual? After all, many grandparents want to help their grandchildren in one way or another; for example, they contribute to college savings plans (“529 plans” ) on behalf of their grandchildren.
For grandparents, the IRS proposed regulations state the following:
- If a grandchild was born between January 1,2025 and December 31, 2028, then a grandparent is allowed to make the election to claim the federal government’s $1,000 contribution (the “seed” contribution) to a grandchild’s Trump Account only if the grandchild is the grandparent’s tax dependent. In that case, at the same time the grandparent claims the $1,000 “seed” contribution, the grandparent makes the election to open up a Trump Account on behalf of the grandchild and can make additional contributions to the account .
- If a grandchild was born before January 1, 2025, then there is a hierarchy as to who can legally open a Trump Account. A grandparent is last in line after a parent, a legal guardian, and an adult sibling. As such, according to the IRS regulations a grandparent cannot legally establish a Trump Account for a grandchild born before January 1,2025 unless there is no parent, legal guardian or adult sibling “available” to do so. The IRS proposed IRS regulations do not define what “available” means. Could it mean that the parent or legal guardian is deceased? Or a parent or legal guardian who is not legally responsible for the child?
In particular according to the IRS proposed regulation, a grandparent who establishes a Trump Account for a grandchild born before January 1,2025 is required to represent under penalty of perjury that the grandparent is authorized to open the Trum Account. Furthermore, the grandparent represents under penalty of perjury, that no other person is available to make the election to open a Trump Account on behalf of the child. The form to open a Trump Account is IRS Form 4547. A copy of IRS Form 4547 is presented here:
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Note IRS Form 4547 Part IV: A grandparent opening a Trump Account on behalf of a grandchild must declare, under penalty of perjury, that the grandparent has examined Form 4547 and “to the best of my knowledge and belief, it is true, correct and complete”. There is nothing on Form 4547 warning the grandparent that by opening a Trump Account for his or her grandchild born before 2025, that the grandparent is also representing to the IRS that no other person is “available” to create the account.
The question then becomes what happens if another person (a parent or a legal guardian) is actually “available”? Does that mean that a grandparent’s election to open a Trump Account on behalf of a grandchild is invalid? Did the grandparent commit perjury by completing the form?
Grandparents who are thinking about opening a Trump Account for a grandchild born before January 1, 2025, are therefore advised to hold off completing IRS Form 4547 until additional IRS guidance comes out. To reiterate: if the grandchild was born before January 1,2025 and has a parent or legal guardian, then the grandparent is not legally authorized to establish a Trump Account on behalf of the grandchild.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.
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Ed Zurndorfer, EA, ATA, CFP®, CLU®, ChFC®, CEBS®, ChFEBC℠: Federal Employee Benefits Expert
A former career Federal employee, Ed has published a staggering 1,200+ separate articles on Federal Benefits and Retirement!
Just “Google” his name, and you are likely to find a plethora of sites that contain his writings. Drawn to its mission to reach, teach
and serve Feds, Serving Those Who Serve is the only financial planning practice with which Ed has chosen to affiliate in over
20 years teaching. In addition to conducting Federal Benefits seminars for Serving Those Who Serve, you can find Ed’s
writings here on our blog in the FedZone, and on Fed-Soup, MyFederalRetirement, FederalNews Radio and NITP.
He is a member of the Maryland Society of Accountants, the National Association of Enrolled Agents, the International Society of Certified Employee Benefits Specialists, the Financial Planning Association, the National Association of Health Underwriters,
and the Society of Financial Service Professionals. Since 1999, Ed has taught many thousands of Federal employees about
their benefits, in person and at Federal agencies all over the country. Ed is a true national treasure.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.