The One Big Beautiful Bill Created a $1,000 Benefit for Babies Born in 2025 and Beyond -- Here Is How to Claim It

Key Points
Children born between Jan. 1, 2025, and Dec. 31, 2028, are eligible for a $1,000 benefit.
The "Trump Account" gets the same tax treatment as a traditional IRA.
You must opt into the Trump Account to receive the $1,000 and get started.
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President Donald Trump signed the One Big Beautiful Bill (OBBB) into law in July 2025. It included plenty of tax cuts and social program changes, including a $1,000 benefit for babies born between Jan. 1, 2025, and Dec. 31, 2028.
This $1,000 isn't like a stimulus check that the government sends directly to your bank account. Instead, it goes to a tax-advantaged account, called a "Trump Account." The account works similarly to a traditional IRA in that investments grow tax-deferred, but the child will owe taxes on withdrawals when eligible (in the calendar year they turn 18).
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Unfortunately, the Trump Account isn't automatically created for eligible children. You have to opt into it and request the initial $1,000 investment provided by the government.
Claiming the $1,000 for the Trump Account
The most straightforward way to get started with your child's Trump Account is by filling out the IRS-provided Form 4547. The form is fairly simple and requests information like your address, your Social Security number along with your child's Social Security number, and a box to opt in for the account.
The IRS says it expects online enrollment to begin by the middle of this year.
After you fill out the form, the Treasury will send you instructions to complete the authentication process and activate your child's account. It says it expects these instructions to come out in May.
How beneficial can the Trump Account be?
Anytime you can give a child a financial head start by setting them on their investment journey, it's a good thing. Even a relatively modest $1,000 initial investment can grow to a meaningful amount of money over many years.
As an example, let's assume you only invest the initial $1,000 and it earns an average of 10% annual returns over the years (the long-term S&P 500 average). Below is how much that $1,000 investment would grow to in different numbers of years:
| Age | Account Value |
|---|---|
| 18 | $5,560 |
| 21 | $7,400 |
| 25 | $10,835 |
| 30 | $17,449 |
| 40 | $45,259 |
These amounts will inevitably depend on your investment returns (which are never guaranteed), but they show the power of compound interest and how small investments can grow into larger amounts over time.
You can continue contributing to the account
Although the initial $1,000 investment is a one-time thing, people can continue contributing to the account on behalf of the child. Right now, the most that can be contributed in a year is $5,000. However, the contribution limit will begin adjusting for inflation after 2027. You can learn more about these accounts by reading The Motley Fool's guide to Trump Accounts for kids.
An employer can also contribute to a Trump Account on behalf of their employee without it counting as taxable income for the employee. It will, however, still count toward the $5,000 annual limit.
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