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.
