KEY TAKEAWAYS: Eligible children born Jan. 1, 2025–Dec. 31, 2028 receive $1,000 federal seed money. Accounts are tax-free IRAs with investments in index funds; parents act as custodians. Any adult can contribute up to $5,000 annually; employers and organizations can also contribute. Billiona ires like Michael Dell and Ray Dalio pledged billions in donations to support the program.   President Donald Trump touted a program during his State of the Union address Tuesday that created investment accounts for children born during Trump’s second term seeded with $1,000 per child from the federal government. Republicans created the program, officially dubbed “Trump accounts,” through the GOP tax-and-spending law last summer. “Tax-free investment accounts for every American child. This is something that’s so special,” Trump said during the speech. He claimed the accounts “could grow to over $100,000 or more” by the time the child turns 18 years old. Here’s what you need to know about the program: Young children are eligible Children born between Jan. 1, 2025, and Dec. 31, 2028, are eligible for the accounts, which are a type of traditional IRA that allows for investments in index funds. They must be U.S. citizens and have a valid Social Security number. The account would receive a one-time contribution of $1,000. Children born before Jan. 1, 2025, but who are not yet 18 years old can also open accounts, but they would not receive the federal seed money. Treasury Secretary Scott Bessent said last week that families had already applied to open some 3 million accounts, though the program doesn’t officially begin until this summer. How they work Parents can file to open the accounts beginning this tax filing season using IRS Form 4547, named for Trump’s presidential terms. The authentication process begins in May, and the administration says the seed money would be available in accounts July 4. The child would own the account, while the parent can act as a custodian until they turn 18. Withdrawals would be taxable until they reach retirement age, unless the beneficiary is using the money for education, a first-time home purchase, birth or adoption costs, or medical expenses. Who can contribute In addition to the federal seed money, any adult can contribute to the accounts up to $5,000 annually. Employers can also contribute to their employees’ children’s accounts up to $2,500 per year per employee as part of the $5,000 annual limit. But states, local governments and nonprofit organizations can also contribute to the accounts, and doing so does not count toward the annual cap. Trump calls on billionaires and companies to give Late last year, the administration called upon ultra-wealthy people to donate to the program. Dell Technologies founder and CEO Michael Dell and his wife, Susan, have said they would contribute $6.25 billion. Billionaire investor Ray Dalio has said he would contribute $250 per account for babies in his home state of Connecticut, an approximately $75 million donation. BlackRock, the world’s largest asset manager, as well as BNY, Charles Schwab, SoFi and Charter Communications have also announced programs to match employees’ contributions to the accounts. ...read more read less