Treasury Implements Automatic Enrollment for Child Retirement Accounts

The Treasury Department announced that, as of October 1, 2026, children under 18 with a valid Social Security number are automatically enrolled in a tax-deferred retirement account known as a Trump Account. The accounts remain inactive until a parent or guardian claims them, which also activates a $1,000 government seed deposit for children born between 2025 and 2028.

Previously, enrollment required families to submit IRS Form 4547 through an app or the IRS website. By mid-September, roughly 7 million to 8 million children had been enrolled under the opt-in system, with low participation among low- to moderate-income families. The new temporary regulations (T.D. 10056) allow the Treasury to open accounts via a master group trust without accessing individual tax returns, expanding coverage to an estimated 73 million children in 44 million families.

“With automatic enrollment, over 60 million more eligible children now have an account ready to be claimed,” Treasury Secretary Scott Bessent said.

The accounts function as traditional IRAs with specific contribution limits: families and friends may contribute up to $5,000 annually, indexed for inflation after 2027; employers can contribute up to $2,500 per employee per year, tax-free to the employee; and a pilot program provides a $1,000 Treasury deposit for eligible newborns. Contributions and the seed deposit are treated separately from the annual $5,000 limit.

To claim an account, parents must download the official app, verify identity and relationship to the child, review the account terms, and, for eligible birth years, opt in for the $1,000 deposit. Contributions from grandparents or employers cannot be made until the account is claimed. Failure to complete these steps leaves the seed money and any potential employer match unclaimed.

The temporary rules remain subject to revision, and the program’s designer, Luke Pettit, is departing the Treasury. Families are advised to compare this option with alternatives such as 529 plans or custodial Roth accounts, consulting a tax professional for guidance on withdrawal tax implications.