Your baby could qualify for $1,000 with a 'Trump Account.' Here's what to know

Описание: As a continuation of President Donald Trump 's pitch to Americans on affordability and the economy under his administration, the U.S. Treasury and White House are celebrating the upcoming launch of a program they view as a key milestone: “Trump Accounts.”

A provision of Trump's tax legislation, Trump Accounts are meant to give $1,000 to every newborn, so long as their parents open an account. That money is then invested in the stock market by private firms, and the child can access the money when they turn 18.

A U.S. Treasury event Wednesday brings together an assortment of politicians and celebrities — from Texas Republican Sen. Ted Cruz to rapper Nicki Minaj — to discuss the program and its potential impact on the economy. Backers of Trump Accounts have said they're a way to help children from low-income households build wealth.

Here’s what you need to know about Trump Accounts and how to claim them.

What is a Trump Account?
It’s a new savings tool where money is invested in the stock market on behalf of a child. The child can’t access the money until they turn 18 and can only use it for specific purposes, such as paying tuition, starting a business or making a down payment on a home.

After a parent opens an account, the U.S. Treasury will contribute $1,000 for newborns. Private banks and brokerages will manage the money, which must be invested in U.S. equity index funds that track the stock market and charge the accounts no more than 0.10% in annual fees.

Parents can contribute up to $2,500 annually in pretax income, much like they do for retirement accounts. Parents’ employers, relatives, friends, local governments and philanthropic groups can also pitch in. Yearly contributions are capped at $5,000, but contributions from governments and charities don’t count toward that total.

Who gets $1,000?
As part of the initiative’s launch, parents of older children are also encouraged to open accounts, but they won’t get the $1,000 bonus. That money is only reserved for babies born during the calendar years of the Trump administration.

To qualify for the $1,000 seed money, a baby must be a U.S. citizen, have a Social Security number and be born between Jan. 1, 2025, and Dec. 31, 2028. Any parent can open an account for a qualifying child, regardless of the parent’s immigration status.

It’s important to note that the child won’t be able to access the money until they turn 18, except in rare circumstances, so it can’t help with immediate expenses. And disbursements from the accounts will be subject to taxes.