A new savings account for children that comes with a $1,000 deposit remained in the Senate’s version of President Trump’s budget bill.
A new savings account for children that comes with a $1,000 deposit from the federal government remained in the U.S. Senate’s version of President Donald Trump’s budget bill.
Funds in the so-called « Trump accounts » can be used for education expenses or credentials, the down payment on a first home or as capital to start a small business.
Qualified withdrawals are taxed at the long-term capital-gains rate, while distributions for any other purposes are taxed as ordinary income.
A new savings account for children with a one-time deposit of $1,000 from the federal government remained in the U.S. Senate’s version of President Donald Trump’s budget bill.
Under the proposal, so-called « Trump accounts », a type of tax-advantaged saving accounts, would be available to all children under the age of eight years old who are U.S. citizens. In earlier versions of the proposal, Trump accounts were termed « Money Accounts for Growth and Advancement » or « MAGA accounts. »
If the bill passes as drafted, parents will be able to contribute up to $5,000 a year and the balance will be invested in a diversified fund that tracks a U.S.-stock index. This part of the Senate Republicans’ version of the One Big Beautiful Bill Act was largely unchanged from the House plan advanced in May.
