Savings
Federal Seed Contribution
Definition
A one-time $1,000 contribution provided by the federal government for eligible children born between 2025 and 2028 to establish a Trump Account.
Key Takeaways
- One-time $1,000 government grant for children born 2025-2028.
- Requires filing IRS Form 4547 to claim.
- Subject to income tax upon retirement distribution.
Detailed Explanation
The Federal Seed Contribution is a $1,000 grant from the U.S. government intended to incentivize early savings. It is available only for children born between January 1, 2025, and December 31, 2028. To claim it, parents must file IRS Form 4547 when opening the account. The seed is fully taxable upon withdrawal, along with all investment growth.
Real-World Example A family has a baby in July 2026. When opening a Trump Account at their financial institution, the parents file IRS Form 4547. The federal government deposits $1,000 directly into the child's account as seed money, which immediately begins compounding in low-cost U.S. index funds.
See Also:Trump Account•Basis (Trump Account)