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How do trust accounts for newborns work?

Asked 5 hours ago

Answer

Trust accounts for newborns involve a $1,000 government deposit into a tax-deferred index fund for every child born between 2025 and 2028. Parents can contribute up to $5,000 yearly, with employer matches up to $2,500. Access is phased: half at age 18, full for specific uses at 25, and unrestricted at 30. Withdrawals are taxed as long-term capital gains.

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Here's how the $1,000 'Trump Accounts' for newborns will work

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  • Every child born between 2025 and 2028 will receive $1,000 in a tax-deferred index fund account.
  • Parents can contribute up to $5,000 per year, with up to $2,500 matched by employers. 23s
  • Eligibility requires U.S. citizenship and valid social security numbers for the child and at least one parent. 49s
  • Funds can be accessed in stages: half at age 18, for specific uses at 25, and fully at 30; withdrawals are taxed. 1m 12s
  • The government will open accounts if parents do not, but some program details remain undecided. 2m 17s
PoliticsFamily & Parenting

References

Here's how the $1,000 'Trump Accounts' for newborns will work
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Scripps News
5 hours ago
Here's how the $1,000 'Trump Accounts' for newborns will work

Every child born between 2025 and 2028 receives $1,000 in a tax-deferred index fund account. Parents can contribute up to $5,000 annually, with employers matching up to $2,500.

Here's how the $1,000 'Trump Accounts' for newborns will work
Icon
Scripps News
5 hours ago
Here's how the $1,000 'Trump Accounts' for newborns will work

At age 18, the child can access half the account. At 25, the full amount is available for specific uses like buying a home, starting a business, or college. At 30, access is unrestricted.

Here's how the $1,000 'Trump Accounts' for newborns will work
Icon
Scripps News
5 hours ago
Here's how the $1,000 'Trump Accounts' for newborns will work

Withdrawals from the account are subject to long-term capital gains tax.

Here's how the $1,000 'Trump Accounts' for newborns will work
Icon
Scripps News
5 hours ago
Here's how the $1,000 'Trump Accounts' for newborns will work

If parents do not open an account, the government will automatically create one when a tax return is filed.

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