New Details On $1K 'Trump Accounts' For New Hampshire Babies

NEW HAMPSHIRE — Children born to Granite State parents in 2025 could get a $1,000 financial boost when they turn 18 under a lesser-known provision of President Donald Trump’s tax legislation passed earlier this year.

All New Hampshire parents of newborns, regardless of their financial circumstances, can open a “Trump Account” to help save and build wealth for many of the expenses that come with adulthood. The plan applies to children born during the Trump administration.

Thanks to a historic donation announced Tuesday by billionaires Michael and Susan Dell, some children under 10 could receive $250 in seed money if their parents open an account. That money is reserved for kids who live in ZIP codes with a median family income of $150,000 or less and who won’t get the $1,000 seed money from the Treasury.

Here’s what Granite State parents need to know about the Trump Accounts and how to claim them.

What Is A Trump Account?

It’s a new savings tool that invests money in the stock market on a child's behalf. The child can’t access the funds 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 percent in annual fees.

Parents can contribute up to $2,500 annually on a pretax basis, 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?

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.

What About Older Children?

Children born before 2025 won’t qualify for the $1,000 incentive, but parents can still open accounts for them as long as they’re under 18.

Parents can still invest up to $2,500 pretax for those kids, and they may benefit from the Dells’ donation, giving $250 to children 10 and under in certain ZIP codes.

How Do Parents Open Accounts?

The accounts won’t be open for contributions until July 2026. But parents of eligible kids can sign up now by filling out Form 4547 from the Internal Revenue Service. As of Wednesday morning, that form was not yet available on the Trump Accounts website.

In May, parents who sign up will receive information on how to complete opening the accounts. Beginning in July, the White House says it will have a website where parents can register for the accounts.

What’s The Idea Behind The Accounts?

Backers of the accounts say they want to introduce more people to the stock market and give even children born into poverty a chance to benefit from it. They believe that giving every newborn $1,000 will help combat the rising popularity of socialism and offer more people the opportunity to build wealth. About 58 percent of U.S. households held stocks or bonds in 2022, according to the U.S. Securities and Exchange Commission, though the wealthiest 1 percent owned almost half the value of stocks in that same year.

Before Trump created the accounts, California, Connecticut, and the District of Columbia were piloting “baby bonds” programs that are similar to Trump Accounts in some ways. Several other states, including Maryland, are weighing programs.

But those programs are targeted for youth growing up in poverty or foster care, plus children who lost a parent to COVID-19. Wealthier children don’t benefit.

They’re also managed by the state, not private investment firms.

What Do Critics Say?

Critics point out the accounts do little to help children in their early years, when they’re most vulnerable and most likely to be in poverty.

They also say the accounts do little to offset the cuts the Trump administration and congressional Republicans have made to other programs that benefit young people and their families, including food assistance and Medicaid. Republicans created the accounts in the same Trump tax bill that reduced spending for some of those programs.

And even with government contributions, critics say the Trump Accounts will widen the wealth gap.

Affluent families who can afford to make the maximum pretax contribution to the accounts will realize the most significant benefits. Poor families who can’t afford to set aside money for the accounts will benefit the least. Assuming a 7 percent return, the $1,000 in seed money would grow to roughly $3,570 over 18 years.

Reporting by The Associated Press

Editor's note: This post was scripted by another Patch staffer, not New Hampshire's editor, for publication on New Hampshire sites.