What tax pros need to know

The IRS and Treasury Department released . Here’s what tax professionals should know about these new revisions in order to effectively guide their clients. 

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Understanding the Trump account tax benefit

How to file Form 4547 to claim Trump account elections

Priority rules for authorized individuals

What Trump accounts mean for tax professionals and their clients

How to navigate OBBBA changes with confidence

Understanding the Trump account tax benefit 

 — the timeframe ending December 31 of the year the beneficiary turns 17. 

Where can contributions come from? 

The accounts accept contributions from multiple sources:  

One-time $1,000 federal pilot contribution for eligible newborns 
Nonprofit and government general contributions 
Employer contributions 
Qualified rollover contributions 
Contributions from parents or other individuals.  

During the growth period, investments are restricted to index-tracking mutual funds or ETFs focused on U.S. equities. 

Can funds be withdrawn? 

Funds generally remain locked until the calendar year the beneficiary turns 18, after which the account converts to traditional IRA treatment for tax purposes. Employer contributions of up to $2,500 annually don’t count as taxable income to the employee, subject to the overall $5,000 annual contribution cap indexed to inflation. 

How to file Form 4547 to claim Trump account elections 

The proposed regulations establish a clear election process using  

Who is eligible for Trump account tax benefits? 

Eligible children must: 

Be under age 18; to be eligible for the one-time $1,000 government pilot contribution, the child must be born between 2025 and 2028 
Be a U.S. citizen 
Have a valid Social Security number 
Not have any prior pilot program elections made on their behalf. 

The same Form 4547 handles both opening the account and requesting the pilot program contribution. Importantly, the regulations clarify that while the election can be made when filing taxes, it’s not technically part of the tax return itself. 

Priority rules for authorized individuals 

The proposed regulations establish a hierarchy for who can make elections when no pilot contribution is involved. In order of priority: the child’s legal guardian, parent, adult sibling, or grandparent. The person making the election must represent under penalty of perjury that no person with higher priority is available. 

The IRS is seeking comments on whether these relationship terms need further clarification and whether other individuals should be included in the authorized list, particularly for foster children, orphans, emancipated minors, and wards of the state. 

What Trump accounts mean for tax professionals and their clients 

Many tax clients who have newborns or are expecting may have questions about this election option. While the contribution limits and investments restrictions are straightforward, practitioners should understand that contributions cannot be made before July 4, 2026.  

The importance of accuracy in Form 4547 Trump account processing 

Elections must be made only for eligible children and only by the appropriate legal guardian under penalty of perjury. In order to ensure that your clients stay compliant, you should work with software that provides the right form coverage and diagnostics. 

Tax professionals using Thomson Reuters UltraTax CS will find the software already recognizes Form 4547. Its advanced diagnostics automatically highlight missing information and misaligned fields so your team can catch discrepancies.  

UltraTax CS coverage of Form 4547 means tax pros can handle these new filings within their existing workflow, maintaining efficiency during tax season while serving clients’ long-term savings needs. 

How to navigate OBBBA changes with confidence 

The IRS is accepting comments on the Trump account election regulations until May 8, while pilot program contribution comments are due April 8. Final regulations will likely address practitioner feedback before implementation. Tax professionals who understand these rules early will be positioned to provide valuable guidance as clients begin opening accounts and claiming the Trump account tax benefit later this year. 

To learn more about the tax implications of the OBBBA and find out how Thomson Reuters tax automation assists tax pros in navigating these changes, check out our resource hub for more information.