IRS Proposes Rules for Trump Accounts Targeting Children Under 18

The IRS issued a proposal on August 20, 2026, outlining acceptable investments for Trump Accounts, tax-advantaged savings vehicles for U.S. citizens under the age of 18 that launched in July 2026.

The proposal addresses specific issues including fees, foreign investments, and ESG funds. It is designed to give financial institutions and account holders clarity on what types of investments qualify under the new rules.

Trump Accounts function as specialized IRAs for children. They allow paycheck contributions and employer matches, with a pre-tax payroll option that may offer significant tax advantages to higher earners. The Treasury had previously proposed rules for the accounts, and the IRS proposal builds on that framework.

The accounts are part of a broader set of financial policy changes in 2026. Federal student loan defaults have risen following the end of pandemic-era protections, and the Education Department has initiated a rollback of some student loan forgiveness credits. Advocacy groups have warned that previously forgiven debt could be reinstated for some borrowers.

On the housing side, 30-year fixed-rate mortgages have hovered around 6.58 percent as of late July, influenced by 10-year Treasury yields that have risen to approximately 4.7 percent. Credit card debt reached $1.26 trillion according to the New York Fed, highlighting what analysts describe as a K-shaped economic divide.

Estimates for the 2027 Social Security Cost-of-Living Adjustment have trended downward as inflation moderates. The Federal Reserve held the Federal Funds Rate steady at its July 29 meeting, with annual inflation remaining at 3.5 percent despite a 0.4 percent drop in consumer prices in June.