The One Big Beautiful Bill Act, enacted on July 4, 2025 as Public Law 119-21, introduced a wide range of changes that will impact tax returns for the 2025 tax year and beyond.
Taxpayers who have a child born between January 1, 2025 and December 31, 2028 will be provided a $1,000 prefunded when they open a “Trump Account”, a new type of federally-backed savings account similar to an IRA account.
Contributions can only be made in calendar years before the beneficiary turns age 18, and distributions can only be made starting in the calendar year the beneficiary turns age 18, however distributions made before age 59-1/2 are subject to the 10% early withdrawal penalty as well as exceptions to the penalty.
Trump Accounts can be opened after July 4, 2026.
The IRS has released Notice 2025-68 that announces upcoming regulations and provides guidance regarding Trump Accounts. Additional information on trump accounts can be found at https://trumpaccounts.gov.
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Additional Information:
IRS: Draft version of Instructions for Form 4547