Understanding the Personal Tax Implications of the New Tax Law in 2025
An overview from Goldman Sachs Family Office and Tax & Policy Research groups.
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Trump Accounts: Overview of Key Features
September 2, 2025
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On July 4, the One Big Beautiful Bill Act (OBBBA) was signed into law. In addition to extending a number of expiring tax provisions from the Tax Cuts and Jobs Act of 2017, OBBBA established a new category of retirement savings accounts called “Trump Accounts” for children (those under age 18).
These new accounts, similar in many ways to traditional IRAs, are designed to encourage children (with the help of their parents or guardian) to start saving early for retirement.
Under OBBBA, the federal government will make a one-time $1,000 deposit into the account for qualified children born between January 1, 2025, and December 31, 2028.
Many account details remain pending at this time. The IRS is expected to issue further guidance and clarification on the rules and administrative procedures governing these accounts. Until then, below is a broad overview of the key features we know so far.
Important: This article is for informational purposes only and is intended to help inform your planning conversation with your financial advisor.
Be aware that many details regarding this new retirement saving vehicle are still awaiting guidance from the IRS. Always visit IRS.gov or consult your tax advisor for the most up-to-date information.
General eligibility and contribution rules
Broadly speaking:
- A Trump Account may be established for someone who has not reached the age of 18 before the end of the calendar year and has a Social Security number.
- Individuals (e.g., the account beneficiary, parents, guardians, etc.) may contribute to the account. In addition, participating employers, states, Indian tribal governments, non-profit entities, and the federal government (as part of a temporary contribution pilot program) may also contribute.
- The total annual contribution limit is $5,000. Generally, participating employers may contribute up to $2,500 for their employee (if under 18) or any dependent of the employee.
- Contributions are not tax-deductible.
- You cannot begin contributing to a Trump Account until July 4, 2026.
Federal contribution pilot program
OBBBA allows the federal government to make a one-time $1,000 deposit into a child’s Trump Account if certain eligibility rules are met. Generally:
- A US citizen born after 2024 and before 2029 with a valid Social Security number.
- May be claimed by their parent (or another) as a dependent.
- No prior election for a government contribution to a Trump Account has been made.
Of note, the $1,000 federal contribution will not count against the annual contribution limit.
Basic distribution rules
Generally, individuals may not withdraw from the account before January 1 of the calendar year in which the beneficiary turns 18.
Given that Trump Accounts operate in many ways like a traditional IRA, withdrawals will generally be treated like any other traditional IRA distributions for tax purposes (e.g., subject to potential income tax and an early withdrawal penalty for distributions before age 59 ½ unless an exception applies).
Planning note
Keep in mind that more specific account rules remain outstanding. We will provide an update once the IRS issues additional guidance. In the meantime, if you have questions about this new type of retirement savings account, talk to your financial or tax advisor.
This article is for informational purposes only and is not a substitute for individualized professional tax advice. Individuals should consult their own tax advisor for matters specific to their own taxes. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Goldman Sachs Bank USA and Goldman Sachs & Co. LLC are not providing any financial, economic, legal, accounting, tax or other recommendations in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates. Neither Goldman Sachs Bank USA, Goldman Sachs & Co. LLC nor any of their affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements of any information contained in this document and any liability therefore is expressly disclaimed. You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format without the express written consent of Goldman Sachs. This foregoing restriction includes, without limitation, using, extracting, downloading or retrieving this information, in whole or in part, to train or finetune a machine learning or artificial intelligence system.
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