While these accounts are primarily designed as a long-term savings tool for children, it’s important that freelancers understand the structure of the program.
Anyone can contribute to a child’s “Trump Account” (up to the annual limit of up to $5,000 per child for 2026 and 2027, subject to a cost-of-living adjustment in subsequent years). Freelancers with supportive family networks can benefit from grandparents helping to reduce their own taxable estates, charitable organizations making qualified contributions, or community groups.
Here’s what you need to know about ‘Trump Accounts’ and whether they can help you as a freelance professional.
What are “Trump accounts” and can they benefit freelancers?
“Trump Accounts” are special savings and investment accounts for children under the age of 18. An adult opens the account for a child in the child’s name, under the child’s Social Security number, and the money is invested to grow over many years. When the child turns 18, the account automatically converts to a traditional IRA.
A child is eligible if they are under age 18 at the time the account is opened, have a Social Security number, and do not require earned income to contribute. This is a significant departure from traditional IRA rules, which normally require earned income to make contributions.
Like traditional IRAs, “Trump Accounts” are tax-deferred. This means that there are no taxes on investment gains as the money grows, and there may be decades of capital accumulation before the child can access the funds. For freelancers who may not always be able to contribute consistently, tax-deferred growth helps maximize the impact of small contributions. In addition, for any tax year ending during the growth period, a contribution will be counted for the year in which the contribution is made (a contribution made in January 2027 applies to 2027 and cannot be applied to 2026; as may be considered made for the previous calendar year).
After the “growth period” (January 1 of the calendar year in which the account recipient reaches age 18), distributions from this account will be subject to the rules that apply to distributions from a traditional IRA. Earnings are deferred but are taxed as ordinary income upon withdrawal (after the beneficiary reaches age 18). Withdrawals are penalty-free for specific expenses, such as higher education or the first home purchase (similar to IRA rules) – unlike 529 plans – where withdrawals made for qualified education expenses are tax-free. This account is still classified as a “Trump account” and even after the growth period, it can never receive contributions under a Sec 408(k) SEP plan or Sec 408(p) SIMPLE IRA plan. It can never be merged with another IRA account into the basis of allocation associated with a distribution from the “Trump account” or any other IRA account.
There is also a temporary federal incentive. To receive a $1,000 free government deposit, the child must be a U.S. citizen born between January 1, 2025 and December 31, 2028. The government will begin depositing this $1,000 into eligible accounts starting July 4, 2026.
“Trump Accounts” can be created beginning in tax year 2026, with contributions allowed beginning July 4, 2026 and beyond. To open an account or apply for the $1,000 federal deposit for a qualifying child, families must complete the federal portal.
Can Freelance Entrepreneurs Use Trump Accounts?
Freelancers often don’t have access to employer-sponsored retirement plans, matching contributions, or predictable income streams. “Trump Accounts” do not replace retirement accounts for adults, but they do create new opportunities for freelancers to reduce taxable income in certain cases and take advantage of employer benefits in their own businesses.
According to the new law, employers can contribute the maximum amount $2,500 per year (subject to cost-of-living adjustment for years after 2027, per employee and not per employee’s dependent) to an employee’s child’s “Trump Accounts,” and these contributions do, too not count as taxable income for the employee. Employer contributions count toward the child’s $5,000 annual contribution limit, but remain tax-advantaged. When the child turns 18, the account becomes a traditional IRA. The $2,500 employer contribution is excludable from the employee’s gross income under section 128(b)(1). This contribution is deductible for the employer.
In some cases, this contribution may be offered under a Section 125 cafeteria plan as a salary reduction if it is deposited into the dependent employee’s “Trump Account,” but not if the contribution is deposited into the employee’s Trump Account; where it would be deferred compensation under section 125(d)(2)(A), as the employee would have a vested right to compensation that may be payable in a later year.
What does this mean for you?
As a freelancer you can benefit from the tax benefits of “Trump Accounts”. Automating contributions can help ensure consistency, even during periods of variable income. Balancing “Trump Account” contributions with personal retirement savings vehicles like SEP IRAs or Solo 401(k)s is something to consider as you review your options.
“Trump accounts” | Domestic Tax Authorities
“Trump accounts”
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