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The Trump Account is a new tax-advantaged savings vehicle designed to help build wealth for children from an early age. Below are the main eligibility rules, contribution limits, setup process, and withdrawal guidelines based on current law (as of tax year 2025–2026).

Eligibility Requirements

To establish a Trump Account for a child, the following must be met:

• The child must be a U.S. citizen with a valid Social Security number.
• The child must be under age 18 at the end of the calendar year in which the election to establish the account is made.
• Only one Trump Account is permitted per child.

Pilot Program Contribution

Children born between January 1, 2025, and December 31, 2028, are eligible for a one-time $1,000 contribution from the U.S. Treasury Department.

• This pilot contribution is deposited automatically upon election.
• It is invested in an index fund.
• It does not count toward annual contribution limits.

Children born outside this period but still under 18 may have an account established without the $1,000 seed funding.

Contribution Limits

• Annual contributions from individuals (parents, grandparents, friends, etc.) and employers are limited to $5,000 per year (post-tax dollars).
• Employer contributions are capped at $2,500 per year and count toward the $5,000 total.
• Employer contributions are excluded from the employee's taxable income.
• The annual limit will be adjusted for inflation starting in 2028.
• The government's $1,000 pilot contribution (where applicable) is separate and does not reduce the $5,000 limit.

How to Establish an Account

• File IRS Form 4547 (Trump Account Election) to make the election and, if eligible, request the pilot contribution.
• The form can be submitted with a federal tax return or electronically via IRS-approved systems.
• The program launched on July 5, 2026.
• Upon election, a designated financial institution will activate the account and receive funds.
• The parent or guardian serves as custodian until the child reaches age 18, at which point the account converts to standard traditional IRA rules under the child's control.

Withdrawals and Distributions

• Withdrawals are generally not permitted before age 18, except in limited circumstances (such as disability or other IRS-approved exceptions).
• After age 18, distributions follow traditional IRA rules and may be used for purposes such as:
  • Education expenses
  • First-home purchase
  • Business startup
  • Retirement

Always check the latest IRS guidance and Form 4547 instructions on IRS.gov, as rules and limits may be updated or clarified over time.

The One Big Beautiful Bill Act (OBBBA) introduced a new federal tax provision often referred to as "No Tax on Overtime". This is the main change related to overtime work.

It does not change overtime pay rules themselves (such as how overtime is calculated, eligibility under the Fair Labor Standards Act (FLSA), or requirements to pay time-and-a-half for hours over 40 in a workweek). Instead, it provides a temporary federal income tax deduction for a portion of qualified overtime pay.

Key Details on the New Overtime Provision

• Effective period: Applies to tax years 2025 through 2028
• What qualifies: Only the premium portion ("half" of "time-and-a-half") of overtime pay required under the federal FLSA (for hours worked over 40 in a workweek).
  • Example: If your regular rate is $20/hour, overtime rate is $30/hour → only the extra $10/hour (the premium) qualifies for the deduction. The full overtime pay is still reported as income, but you can deduct the premium part.
• Excludes: State-required overtime (e.g., daily overtime in some states), contractual overtime beyond FLSA requirements, voluntary overtime, or other bonuses.

Deduction Limits

• Up to $12,500 per year for single filers (or $25,000 for married filing jointly).
• Phases out for higher earners: Begins reducing above modified adjusted gross income (MAGI) of $150,000 (single) or $300,000 (joint), typically by $100 for every $1,000 over the threshold.

Who Can Claim It

• Non-exempt (hourly/FLSA-eligible) workers who receive qualified overtime.
• Available as an above-the-line deduction (even if you don't itemize).
• Requires a valid Social Security Number; married individuals generally must file jointly.

How It's Claimed

Employees deduct it on their federal tax return. Overtime remains subject to withholding, FICA (Social Security/Medicare), and is fully reported as income initially.

Changes for Employers and Reporting

• 2025: Transitional year — employers were not strictly required to separately report qualified overtime on Form W-2 (IRS provided relief from penalties), but they often needed to provide statements or calculations for employees to claim the deduction.
• 2026 and later: Employers must separately report qualified overtime compensation on Form W-2 (and certain 1099 forms), making it easier for workers to claim the deduction accurately. Payroll systems have been updating to track and distinguish the premium portion.

This provision aims to provide tax relief to hourly workers who put in extra hours, similar to the related "No Tax on Tips" deduction in the same bill.

For the most accurate personal advice, check IRS guidance (e.g., their FAQs or notices like Notice 2025-69) or consult a tax professional, as details can depend on individual circumstances.