MILLIONS of Americans are set to receive $1,000 automatic payments – find out when you’ll get yours.
Trump signed his nearly 1,000-page budget reconciliation plan, the One Big Beautiful Bill, into law on July 4.
Parents, and their employers, can also pay in up to $5,000 a year[/caption]
The accounts are set up by the government for people under the age of 18 who were born in the US.
The goal of the accounts is to set up American newborns for future success by supporting their future educational pursuits, encouraging homeownership, and boosting their overall financial wellbeing.
“This will afford a generation of children the chance to experience the miracle of compounded growth and set them on a course for prosperity from the very beginning,” the White House said.
President Trump added how they will “fuel massive economic growth” and “lift up the hard-working citizens who make this country run.”
Trump’s savings proposal was originally named “Money Accounts for Growth and Advancement,” or MAGA, but was recently renamed “Trump Account.”
It will see children born between Jan 1, 2025 and Dec 31, 2028 eligible for a one-time $1,000 check in their Trump Account.
Parents, and their employers, can also pay in up to $5,000 a year until the child celebrates their 18th birthday.
This figure may be adjusted in future to match inflation.
The only thing that’s needed to start an account is a social security number – and only one per child is permitted.
There are also no income requirements to be eligible.
Those with the Trump Accounts can release the money when they’re 18.
But it has to be invested in a low-cost stock mutual funds, or exchange-traded funds.
Contributions made before a newborn turns 18 are not eligible for tax deductions, although up to $2,500 a year given by employers will not count as taxable income.
Goldman Sachs CEO David Solomon said in a statement: “This initiative gets at the core of binding those future generations to the benefits and the potential of America’s great companies and markets,” Goldman Sachs CEO David Solomon said in a statement.
“Early childhood investments have far-reaching benefits, and Goldman Sachs is proud to support his initiative … Our economy’s future vitality is dependent on young people understanding the power of investing for the long term.”
Once the beneficiary turns 18, the Trump Account will be treated as a traditional IRA and subject to the usual contribution limits and other requirements, Ian Berger, analyst at an IRA advisory, firm told The New York Times.
Money contributed to traditional IRAs are tax deductible for those who qualify based on their income and other requirements, per IRS rules.
Withdrawals made from traditional IRAs before a beneficiary reaches age 59.5 are generally taxed as ordinary income, plus a 10% penalty.
The penalty may be dismissed in certain circumstances, such as using the cash to fund higher education, the birth of a child, or making a down payment on a first home.
Additional guidance is expected from the IRS to clarify this, Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals, told The New York Times.
Trump Accounts could create a powerful IRA according to experts, because the deposited cash could remain invested and grow for decades – a head start considering that many Americans do not begin saving for retirement until their early 30s.
Aside from creating Trump Accounts, the One Big Beautiful Bill means that certain taxpayers could face higher monthly payments.
It also means that Americans could see up to $12,000 extra on their Social Security paycheck yearly – there’s just two requirements.
Trump’s main policy points
- Implementing tax cuts, including no tax on tips.
- Protecting Social Security and Medicare – Trump said, “Incomes will skyrocket and the middle class will prosper like never before.”
- Protecting borders – He pledged to end the “border nightmare.” That means two things on day one – “Drill baby Drill,” as he said, and close the borders.
- Finishing building the wall.
- Keeping our “sons and daughters safe.”
- Replenishing the military and building a military “dome” – Trump insisted he could stop wars with just a phone call and said no military would be able to penetrate the USA if he came into office.
- Ending the war in Ukraine and imposing tariffs on Iran.
- Vowing to “beat” China.
- Working to decrease prices and ease inflation.
- Bringing down the cost of energy.
- Making cities “safe, clean and beautiful” again.
- Making it possible for Americans to buy gas-run cars by ending the electric vehicle mandate on the first day of his presidency.
Children born between Jan 1, 2025 and Dec 31, 2028 are eligible[/caption]
