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Kids born in Pennsylvania will receive a $1,000 financial start at age 18 through a new federal savings program.
The “Trump Account” program, which was signed into law by President Donald Trump last year, allows all Pennsylvania parents of newborns to open tax-deferred investment accounts regardless of income.
The program applies to children born between 2025 and 2029.
While the $1,000 federal seed money is reserved for those born in 2025 or after, all U.S. children under 18 with a valid Social Security number are eligible for an account.
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Parents or legal guardians can manage these accounts, which allow for a maximum annual contribution of $5,000 from families, friends, and employers.
Private donations are also augmenting the program, as Billionaires Michael and Susan Dell have donated funds to provide $250 in seed money for some children age 10 and under. The donation will benefit children in ZIP codes with a median family income of $150,000 or less who do not qualify for the $1,000 federal deposit. Several large corporations and employers have also pledged to contribute to the accounts.
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Funds in the accounts will be placed in a diversified portfolio of low-cost index funds, according to the U.S. Treasury Department.
Once a beneficiary turns 18, they gain full control of the account and can withdraw funds for qualified expenses, including starting a business, purchasing a first home or pursuing higher education.
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Withdrawals for these purposes are taxed at ordinary income rates.
Backers of the accounts say the program is designed to increase stock market participation and provide children born into poverty a stake in the economy.
According to the U.S. Securities and Exchange Commission, about 58 percent of U.S. households held stocks or bonds in 2022, but the wealthiest 1 percent owned nearly half of the total value.
Critics, argue the accounts do little for children during their vulnerable early years and do not offset cuts to Medicaid and food assistance.
The federal program joins existing state-level efforts in Pennsylvania.
The Keystone Scholars program offers a $100 scholarship for children born or adopted in the state since 2019. The money is invested by the Pennsylvania Treasury and can be used for education expenses between ages 18 and 29.
“It’s exciting to see the federal government implement a program much like our successful Keystone Scholars,” Pennsylvania State Treasurer Stacy Garrity said.
Garrity encouraged families to also use PA 529 accounts, which offer state and federal tax benefits for education savings. Pennsylvanians can deduct up to $19,000 in PA 529 contributions annually, or $38,000 for married couples filing jointly.
Parents can open a Trump Account for eligible children using the new IRS Form 4547 during tax filing or through an online portal expected to launch by summer 2026 on a federal website.