New Tax Law

New 2026 Trump Accounts (IRC § 530A): What Louisiana Families Need to Know About the $1,000 Government Seed Contribution

As a Louisiana-based CPA with over a decade of experience helping families and businesses navigate complex tax and savings strategies, I’ve been tracking the rollout of the new federal child savings program established under the One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025). This legislation created “Trump Accounts” under Internal Revenue Code § 530A, designed to provide long-term savings opportunities for children.

Trump Accounts are a new type of tax-advantaged savings vehicle specifically for minors – Charles Renwick, CPA

With the program’s key milestones approaching—tax filing season for the 2025 returns (due April 15, 2026) and the first government contributions starting July 4, 2026—many Louisiana families are searching for clear, reliable information on how to participate. This post explains the basics, eligibility, opening process, and next steps in a straightforward way.

What Is a Trump Account Under IRC § 530A?

Trump Accounts are a new type of tax-advantaged savings vehicle specifically for minors, similar in concept to 529 college savings plans or custodial Roth IRAs but with distinct rules tied to federal legislation. The official name “Trump Account” comes directly from the statute (26 U.S.C. § 530A), and the program is administered through the U.S. Treasury Department.

The core feature is a one-time $1,000 government seed deposit for eligible children. Beyond that, families can make additional contributions, and the account can grow through qualified investments. Unlike automatic programs, families must take proactive steps to open and claim the seed money—nothing is auto-enrolled.

Who Qualifies for the $1,000 Government Seed?

Eligibility is broad to maximize participation:

Every child born between January 1, 2025, and December 31, 2028, qualifies for the $1,000 seed.
Any minor under age 18 with a valid U.S. Social Security number can establish an account, even if born outside the specified window.
The account is for the benefit of the child (the “beneficiary”), with a parent or guardian acting as custodian.

There is no income limit for opening an account or receiving the seed deposit. This creates a total addressable market of over 70 million potential accounts nationwide.

How to Open a Trump Account (Form 4547 + Tax Return)

The easiest and most common way to open a Trump Account is during tax filing:

File IRS Form 4547 (Election to Establish Trump Account) with your 2025 federal tax return, due April 15, 2026.
Alternatively, use the online portal at trumpaccounts.gov (an official U.S. government site) to make the election.
Once elected, the Treasury Department serves as the default custodian and will deposit the $1,000 seed on July 4, 2026 (no contributions before this date).

Private custodians (e.g., Fidelity, Charles Schwab, Vanguard, Empower) are preparing to accept trustee-to-trustee rollovers starting mid-2026. Many have already published guides and announced matching programs to attract families early.

Contribution Rules and July 4, 2026 Deadline

Annual contribution limit: Up to $5,000 per year from family members (no employer contributions allowed under current guidance).
Government seed: $1,000 one-time deposit for eligible children.
First contributions (including the seed) begin July 4, 2026.
No contributions are permitted before this date, per Treasury/IRS Notice 2025-68 and proposed regulations issued March 2026.

Tax advantages include tax-deferred growth, with qualified distributions potentially tax-free for certain purposes (final rules still evolving).

Investment Options and 0.10% Expense Cap

Investments are tightly regulated to keep the program simple and low-risk:

Permitted assets: Qualifying mutual funds or ETFs that track broad U.S. equity indexes (e.g., S&P 500 or similar).
Expense ratio cap: 0.10% or less for default investments.
No leverage, derivatives, or high-risk strategies allowed.

This structure resembles low-cost index funds in many retirement accounts, making it accessible for long-term growth.

Should You Roll Over to a Private Custodian?

While the Treasury starts as custodian, the program explicitly allows trustee-to-trustee rollovers to private firms once eligible (mid-2026 onward). Reasons families might roll over:

More investment choices (within limits).
Better account management tools or mobile apps.
Integration with existing brokerage accounts.
Employer matches (e.g., Schwab announced a $1,000 match for eligible employees’ children; Empower and others have similar programs).

For a complete, independent guide to the program, rollover procedures, and custodian comparisons, visit gettrumpaccount.com or gettrumpaccounts.com. These resources provide detailed checklists and neutral information.

Louisiana-Specific Tax Considerations

Louisiana generally conforms to federal tax treatment for savings accounts, but families should confirm state tax implications for contributions and distributions. As a local CPA, I recommend reviewing your specific situation—especially if you have multiple children or are coordinating with 529 plans or custodial accounts. Louisiana’s tax code doesn’t currently offer additional state incentives for Trump Accounts, but federal benefits stand alone.

Trump Account FAQ

What is a Trump Account under IRC § 530A?

A Trump Account is a new federal savings program for children created by the One Big Beautiful Bill Act. It includes a $1,000 government seed deposit and allows tax-advantaged growth with strict low-cost investment rules.

Who qualifies for the $1,000 government seed contribution?

Every child born between January 1, 2025, and December 31, 2028, and any minor under age 18 with a valid Social Security number.

How do I open a Trump Account?

The simplest way is to file IRS Form 4547 with your 2025 tax return (due April 15, 2026) or use the official portal at trumpaccounts.gov.

When can contributions start for a Trump Account?

The government seed and all contributions begin on July 4, 2026. No money can be deposited before that date.

Can I roll over a Trump Account to a private custodian like Fidelity or Schwab?

Yes. Starting mid-2026, you can do a trustee-to-trustee rollover to any participating brokerage for more tools and potential employer matches.

Are Trump Accounts available in Louisiana?

Yes. The program is federal, so every Louisiana family can participate. Louisiana follows federal tax treatment for these accounts.

Important Disclaimers & Next Steps

This article is for informational purposes only and does not constitute tax, financial, or legal advice. Rules are based on current IRS guidance (Notice 2025-68 and proposed regulations as of March 2026) and may change.

This website (cmrtax.com) and the linked resources are independent informational sites and are not affiliated with the U.S. Treasury, the IRS, any government agency, the Trump Organization, or Donald J. Trump. The term “Trump Account” is used descriptively to refer to accounts established under 26 U.S.C. § 530A. Always verify the latest details directly from official sources like irs.gov or trumpaccounts.gov, and consult your own tax advisor before taking action.

If you’re a Louisiana family preparing for 2025 taxes or planning child savings, reach out to my firm for personalized guidance on integrating Trump Accounts into your overall strategy.

Small business owners: A SEP may give you one last 2017 tax and retirement saving opportunity

Are you a high-income small-business owner who doesn’t currently have a tax-advantaged retirement plan set up for yourself? A Simplified Employee Pension (SEP) may be just what you need, and now may be a great time to establish one. A SEP has high contribution limits and is simple to set up. Best of all, there’s still time to establish a SEP for 2017 and make contributions to it that you can deduct on your 2017 income tax return.

2018 deadlines for 2017

A SEP can be set up as late as the due date (including extensions) of your income tax return for the tax year for which the SEP is to first apply. That means you can establish a SEP for 2017 in 2018 as long as you do it before your 2017 return filing deadline. You have until the same deadline to make 2017 contributions and still claim a potentially hefty deduction on your 2017 return.

Generally, other types of retirement plans would have to have been established by December 31, 2017, in order for 2017 contributions to be made (though many of these plans do allow 2017 contributions to be made in 2018).

High contribution limits

Contributions to SEPs are discretionary. You can decide how much to contribute each year. But be aware that, if your business has employees other than yourself: 1) Contributions must be made for all eligible employees using the same percentage of compensation as for yourself, and 2) employee accounts are immediately 100% vested. The contributions go into SEP-IRAs established for each eligible employee.

For 2017, the maximum contribution that can be made to a SEP-IRA is 25% of compensation (or 20% of self-employed income net of the self-employment tax deduction) of up to $270,000, subject to a contribution cap of $54,000. (The 2018 limits are $275,000 and $55,000, respectively.)

Simple to set up

A SEP is established by completing and signing the very simple Form 5305-SEP (“Simplified Employee Pension — Individual Retirement Accounts Contribution Agreement”). Form 5305-SEP is not filed with the IRS, but it should be maintained as part of the business’s permanent tax records. A copy of Form 5305-SEP must be given to each employee covered by the SEP, along with a disclosure statement.

Additional rules and limits do apply to SEPs, but they’re generally much less onerous than those for other retirement plans. Contact us to learn more about SEPs and how they might reduce your tax bill for 2017 and beyond.

TCJA temporarily lowers medical expense deduction threshold

With rising health care costs, claiming whatever tax breaks related to health care that you can is more important than ever. But there’s a threshold for deducting medical expenses that may be hard to meet. Fortunately, the Tax Cuts and Jobs Act (TCJA) has temporarily reduced the threshold.

What expenses are eligible?

Medical expenses may be deductible if they’re “qualified.” Qualified medical expenses involve the costs of diagnosis, cure, mitigation, treatment or prevention of disease, and the costs for treatments affecting any part or function of the body. Examples include payments to physicians, dentists and other medical practitioners, as well as equipment, supplies, diagnostic devices and prescription drugs.

Mileage driven for health-care-related purposes is also deductible at a rate of 17 cents per mile for 2017 and 18 cents per mile for 2018. Health insurance and long-term care insurance premiums can also qualify, with certain limits.

Expenses reimbursed by insurance or paid with funds from a tax-advantaged account such as a Health Savings Account or Flexible Spending Account can’t be deducted. Likewise, health insurance premiums aren’t deductible if they’re taken out of your paycheck pretax.

The AGI threshold

Before 2013, you could claim an itemized deduction for qualified unreimbursed medical expenses paid for you, your spouse and your dependents, to the extent those expenses exceeded 7.5% of your adjusted gross income (AGI). AGI includes all of your taxable income items reduced by certain “above-the-line” deductions, such as those for deductible IRA contributions and student loan interest.

As part of the Affordable Care Act, a higher deduction threshold of 10% of AGI went into effect in 2014 for most taxpayers and was scheduled to go into effect in 2017 for taxpayers age 65 or older. But under the TCJA, the 7.5%-of-AGI deduction threshold now applies to all taxpayers for 2017 and 2018.

However, this lower threshold is temporary. Beginning January 1, 2019, the 10% threshold will apply to all taxpayers, including those over age 65, unless Congress takes additional action.

Consider “bunching” expenses into 2018

Because the threshold is scheduled to increase to 10% in 2019, you might benefit from accelerating deductible medical expenses into 2018, to the extent they’re within your control.

However, keep in mind that you have to itemize deductions to deduct medical expenses. Itemizing saves tax only if your total itemized deductions exceed your standard deduction. And with the TCJA’s near doubling of the standard deduction for 2018, many taxpayers who’ve typically itemized may no longer benefit from itemizing.

Contact us if you have questions about what expenses are eligible and whether you can qualify for a deduction on your 2017 tax return. We can also help you determine whether bunching medical expenses into 2018 will likely save you tax.

Claiming bonus depreciation on your 2017 tax return may be particularly beneficial

With bonus depreciation, a business can recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The Tax Cuts and Jobs Act (TCJA), signed into law in December, enhances bonus depreciation.

Typically, taking this break is beneficial. But in certain situations, your business might save more tax long-term by skipping it. That said, claiming bonus depreciation on your 2017 tax return may be particularly beneficial.

Pre- and post-TCJA

Before TCJA, bonus depreciation was 50% and qualified property included new tangible property with a recovery period of 20 years or less (such as office furniture and equipment), off-the-shelf computer software, water utility property and qualified improvement property.

The TCJA significantly expands bonus depreciation: For qualified property placed in service between September 28, 2017, and December 31, 2022 (or by December 31, 2023, for certain property with longer production periods), the first-year bonus depreciation percentage increases to 100%. In addition, the 100% deduction is allowed for not just new but also used qualifying property.

But be aware that, under the TCJA, beginning in 2018 certain types of businesses may no longer be eligible for bonus depreciation. Examples include real estate businesses and auto dealerships, depending on the specific circumstances.

A good tax strategy or not?

Generally, if you’re eligible for bonus depreciation and you expect to be in the same or a lower tax bracket in future years, taking bonus depreciation is likely a good tax strategy (though you should also factor in available Section 179 expensing). It will defer tax, which generally is beneficial.

On the other hand, if your business is growing and you expect to be in a higher tax bracket in the near future, you may be better off forgoing bonus depreciation. Why? Even though you’ll pay more tax this year, you’ll preserve larger depreciation deductions on the property for future years, when they may be more powerful — deductions save more tax when you’re paying a higher tax rate.

What to do on your 2017 return

The greater tax-saving power of deductions when rates are higher is why 2017 may be a particularly good year to take bonus depreciation. As you’re probably aware, the TCJA permanently replaces the graduated corporate tax rates of 15% to 35% with a flat corporate rate of 21% beginning with the 2018 tax year. It also reduces most individual rates, which benefits owners of pass-through entities such as S corporations, partnerships and, typically, limited liability companies, for tax years beginning in 2018 through 2025.

If your rate will be lower in 2018, there’s a greater likelihood that taking bonus depreciation for 2017 would save you more tax than taking all of your deduction under normal depreciation schedules over a period of years, especially if the asset meets the deadlines for 100% bonus depreciation.

If you’re unsure whether you should take bonus depreciation on your 2017 return — or you have questions about other depreciation-related breaks, such as Sec. 179 expensing — contact us.

State and local sales tax deduction remains, but subject to a new limit

Individual taxpayers who itemize their deductions can deduct either state and local income taxes or state and local sales taxes. The ability to deduct state and local taxes — including income or sales taxes, as well as property taxes — had been on the tax reform chopping block, but it ultimately survived. However, for 2018 through 2025, the Tax Cuts and Jobs Act imposes a new limit on the state and local tax deduction. Will you benefit from the sales tax deduction on your 2017 or 2018 tax return?

Your 2017 return

The sales tax deduction can be valuable if you reside in a state with no or low income tax or purchased a major item in 2017, such as a car or boat. How do you determine whether you can save more by deducting sales tax on your 2017 return? Compare your potential deduction for state and local income tax to your potential deduction for state and local sales tax.

This isn’t as difficult as you might think: You don’t have to have receipts documenting all of the sales tax you actually paid during the year to take full advantage of the deduction. Your deduction can be determined by using an IRS sales tax calculator that will base the deduction on your income and the sales tax rates in your locale plus the tax you actually paid on certain major purchases (for which you will need substantiation).

Your 2018 return

Under the TCJA, for 2018 through 2025, your total deduction for all state and local taxes combined — including property tax — is limited to $10,000. You still must choose between deducting income and sales tax; you can’t deduct both, even if your total state and local tax deduction wouldn’t exceed $10,000.

Also keep in mind that the TCJA nearly doubles the standard deduction. So even if itemizing has typically benefited you in the past, you could end up being better off taking the standard deduction when you file your 2018 return.

So if you’re considering making a large purchase in 2018, you shouldn’t necessarily count on the sales tax deduction providing you significant tax savings. You need to look at what your total state and local tax liability likely will be, as well as whether your total itemized deductions are likely to exceed the standard deduction.

Questions?

Let us know if you have questions about whether you can benefit from the sales tax deduction on your 2017 return or about the impact of the TCJA on your 2018 tax planning. We’d be pleased to help.