Trump’s accounts just received a promised huge donation. Here’s what to know about who’s eligible

Parents, you’ll need a bigger piggy bank.

Michael and Susan Dell’s announcement that they will donate more than $6 billion in contributions to Trump’s soon-to-be-opened accounts is a “very exciting” development for American children, experts say.

He watches: Deal family pledges more than $6 billion to US children to build on ‘Trump accounts’

Ray Bishara, senior policy advisor at the Center for Social Development at Washington University in St. Louis, said the donation is “a remarkable amount for any charitable endeavor.”

Contributions to investment accounts, which were signed into law on July 4 as part of President Donald Trump’s massive spending bill, can be made starting next Independence Day. Indeed, children born between January 1, 2025 and December 31, 2028 will receive $1,000 in seed money contributed by the federal government.

Through a donation from the Michael and Susan Dell Foundation, children ages 10 and under who were born before 2025 will receive $250 in their Trump accounts. Children must also live in zip codes where the median household income is less than $150,000.

Based on his conversations after Tuesday’s announcement, Bishara said he feels other organizations will be inspired to follow the Dills brothers’ example. That’s because the accounts were created with a unique feature that allows organizations, such as cities, states and nonprofits, to contribute to all children in an “eligible category,” such as those born in a particular year or state.

How will Trump’s accounts work?

Trump’s accounts will operate similarly to retirement accounts. Children will not be able to withdraw from accounts before they turn 18 years old. Withdrawals will be subject to a penalty unless the funds are used for qualifying reasons, such as higher education expenses or purchasing a first home.

He watches: 4 things to know about Trump’s children’s accounts

The accounts will be managed by a Treasury Department “appointed financial agent,” according to the government, but parents will be able to transfer the accounts to their brokerage, if they have one, “at a later date.” The money will be invested in stock market indices such as the S&P 500.

Parents will be able to open accounts by filing IRS Form 4547 once they finish a draft of the form, and the government says online registration will be available next year.

What families must do to open an account, and other caveats

Since Trump signed the accounts into law, the government has clarified some of the concerns experts initially had. For example, Bishara said, the balance of the accounts will not count against the maximum household assets, the minimum that determines eligibility for government support such as food assistance.

However, other concerns remain, said Madeleine Brown, senior policy fellow at the Urban Institute.

Chief among them is that parents can only open accounts by filling out a tax form, rather than registering automatically.

“We are concerned that millions of families, especially low- and middle-income families, will not go through all these steps to actually create the account,” Bishara said.

Right now, the government says IRS Form 4547 will be able to be filled out whenever parents choose, although the form is not yet available. It is expected that parents will be able to register online by the middle of next year.

Children must have a Social Security number to open a Trump account, so the Social Security Administration has a database of everyone who qualifies, Brown noted.

“The administration has been very clear that they want this to be a program for everyone,” Brown said. “Why add this extra step?”

Withdrawal penalties also limit the functionality of the accounts for some families, Brown said. While $1,000 — or even $250 — is useful seed money, parents may decide that a 529 plan is a better option due to its broader range of withdrawal options. A high-yield savings account will be less restrictive.

“If you encounter unexpected expenses and you have some money in your account, even if you are going to be penalized, you can still withdraw,” Brown said.

Bishara also wants to see graduated deposits — contributions that increase as household income declines — for children in low-wealth families.

He said: “It is great that the Dales, and perhaps others, are contributing money to these accounts for low-income children. However, this is no substitute for the government itself actually making progressive deposits for all children, ideally at birth onwards.”

He watches: A brief but fascinating look at the construction of natural right capital

But these fears do not outweigh his hopes in terms of calculations.

“Not enough Americans are taking advantage of the stock market, and I think Trump’s calculations have that potential,” Bishara said. “This potential will be realized once all children have accounts, and there is real money in those accounts.”