WASHINGTON — The Treasury Department plans to automatically enroll tens of millions of children in Trump Accounts as soon as this week, expanding access to the government’s new child investment program while leaving families responsible for requesting a separate $1,000 federal contribution,
Rules published Tuesday replace a system that required parents or guardians to sign up and would create accounts for more than 60 million additional children younger than 18, according to Treasury figures cited by the Wall Street Journal.
The change also would broaden the reach of private contributions, including a $6.25 billion pledge from Michael Dell.
“Stakeholders have expressed that eligible donors prefer that their contributions reach all children, not just children whose parents have the awareness to opt in,” Treasury said in the rules.
The administration launched Trump Accounts in early July, promoting them as a way for children to begin saving and investing before they typically qualify for some other tax-advantaged accounts.
Treasury had processed 5.6 million account-opening forms by the end of July. Treasury Secretary Scott Bessent has said seven-million children are enrolled, out of approximately 73 million eligible children, the Journal reported.
Credit unions are not yet eligible for the accouns.
Families Must Request Federal Contribution
Children born from 2025 through 2028 qualify for a $1,000 government contribution. Automatic enrollment, however, will not trigger that payment.
The tax law enacted last year that created Trump Accounts requires taxpayers to specifically elect to receive the contribution, and the new rules do not change that requirement, according to the Journal.
Jin Huang, a professor of social policy at Washington University in St. Louis, told the newspaper that automatic enrollment would allow assets in the accounts to begin growing without families having to take action.
“This is the most important design change since the law passed,” Huang said. “This is huge.”
Parents and guardians still must claim automatically created accounts to take full advantage of them, including making their own contributions and accepting employer contributions.
Robinhood and Bank of New York Mellon are managing the accounts, which have a dedicated phone app and website. The rules do not provide complete instructions for how families can claim accounts created through automatic enrollment, the Journal reported.
Treasury Establishes New Enrollment Structure
Administration officials previously maintained that the law did not permit the government to create accounts for children whose families had not enrolled them.
In Tuesday’s rules, officials said they “found a path to overcome those constraints.”
Treasury will use a master group trust capable of handling transactions without obtaining specific information about individuals that investment managers would not legally be allowed to receive, according to the Journal.
That structure also will allow the government to add approximately 2 million newborns annually without requiring parents to sign them up.
Stock Donations Raise Investment Questions
The rules also establish a framework allowing private donors to contribute appreciated stock directly to Trump Accounts, a change Treasury said could attract substantial additional donations.
The move introduces the accounts to the risks associated with holding individual securities, the Journal reported.
Although the law requires Trump Accounts to invest only in diversified, low-cost index funds, Treasury concluded that direct stock donations do not violate that restriction because the accounts would receive the shares rather than purchase them with account funds.
Nina Olson, a former national taxpayer advocate who now serves as executive director of the Center for Taxpayer Rights, questioned that interpretation.
“It undermines the entire purpose of the regulated index fund requirement, which is stability,” Olson told the Journal.
She warned that donated shares could lose their value in a market collapse, undermining the benefit to children, the Journal added.
Under the regulations, donated stocks must be held for five years before they can be sold.
Tax Benefits Could Encourage Donations
The stock-donation framework would allow wealthy donors to contribute appreciated securities through a charity, which could then transfer the shares to Trump Accounts.
That arrangement would allow donors to avoid capital-gains taxes on the shares, receive an income-tax deduction and move assets out of their taxable estates, the Journal reported.
Treasury said several donors are prepared to contribute stock on a scale comparable to Dell’s pledge but would not make cash donations.
The department concluded that the benefits of attracting those contributions would outweigh the additional investment risks associated with more concentrated portfolios.
