As a freelance professional, saving for the future — especially if you have children — is critical. A new federal program, created under the Working Families Tax Cuts introduces a tool that may become useful for freelancers and their families: “Trump Accounts.”

Although these accounts were designed primarily as long‑term savings vehicles for children, it's important freelancers understand the structure of the program.

Anyone can contribute to a child’s “Trump Account” (up to the annual limit of up to an aggregate of $5,000 cap per child for 2026 and 2027, to be subject to cost-of-living adjustment in the following years), freelancers with supportive family networks may benefit from grandparents contributing to reduce their own taxable estates, charitable organizations making qualified contributions, or community groups.

Here is what you need to know about “Trump Accounts” and if they can benefit you as a freelance professional.

What Are “Trump Accounts” and Can They Benefit Freelancers?

“Trump Accounts” are special savings and investment accounts for children under age 18. An adult opens the account for a child in the child’s name, under child’s Social Security number, and the money is invested to grow over many years. When the child turns 18, the account automatically converts into a traditional IRA.

A child is eligible if they are under 18 when the account is opened, have a Social Security number, and they do not need earned income to contribute. This is a major departure from traditional IRA rules, which normally require earned income to make contributions.

Like traditional IRAs, “Trump Accounts” grow tax‑deferred. This means there are no taxes on investment gains while the money grows, and potentially decades of compounding before the child accesses the funds. For freelancers who may not always be able to contribute consistently, tax‑deferred growth helps maximize the impact of small contributions. Additionally, for any taxable year ending during the growth period, a contribution is counted for the year in which the contribution is made (a contribution made in January 2027, is for 2027 and cannot be applied to 2026; as is possible for considered as made for previous calendar year).

After the “growth period” (January 1st of the calendar year in which the account beneficiary reaches the age of 18), distributions from this account are subject to the rules that apply to distributions from a traditional IRA. Earnings grow tax-deferred but are taxed as ordinary income upon withdrawal (after the beneficiary reaches the age of 18). Withdrawals are penalty-free for specific expenses, like higher education or a first-time home purchase (similar to IRA rules) — unlike 529 plans — where qualified education expenses related withdrawals are tax-free. This account continues to be designated as a “Trump Account”, and even after the growth period, it can never receive contributions under a Sec 408(k) SEP arrangement or Sec 408(p) SIMPLE IRA plan. It can never be aggregated with other IRA account when allocating basis related to a distribution from either the “Trump Account” or another IRA account.

There is also a temporary federal incentive. To receive a free $1,000 government deposit, the child must be a U.S. citizen born between January 1, 2025, and December 31, 2028. The government will begin depositing this $1,000 into eligible accounts starting July 4, 2026.

“Trump Accounts” can be created beginning in tax year 2026, with contributions allowed starting from July 4, 2026 and onward. To open an account or request the $1,000 federal deposit for qualified child, families must use the federal portal.

Can Freelance Business Owners Can Use Trump Accounts?

Freelancers often lack access to employer‑sponsored retirement plans, matching contributions, or predictable income streams. “Trump Accounts” don’t replace retirement accounts for adults, but they do create new opportunities for freelancers to reduce taxable income in certain cases and use employer‑style benefits in their own businesses.

Under the new law, employers can contribute up to $2,500 per year (subject to the cost-of-living adjustment for years after 2027, per employee and not per the dependent of the employee) to an employee’s child’s “Trump Accounts”, and these contributions do not count as taxable income for the employee. Employer contributions count toward the child’s $5,000 annual contribution limit but remain tax‑advantaged. When the child turns 18, the account becomes a traditional IRA. The employer $2,500 contribution is excludible from the gross income of the employee under Section 128(b)(1). This contribution is deductible by the employer.

In some cases, this contribution may be offered under a Section 125 cafeteria plan as a salary reduction if it is made to the “Trump Account” of the employees’ dependent, but not if the contribution is made to the Trump account of the employee; where it would be a deferred compensation under Section 125(d)(2)(A), since the employee would have a vested right to compensation that may be payable in a later year.

What Does This Mean for You?

As a freelancer, you can leverage the tax benefits of “Trump Accounts”. Automating contributions can help ensure consistency even during periods of variable income. Balancing “Trump Account” contributions with personal retirement savings vehicles such as SEP IRAs or Solo 401(k)s is something to consider as you review your options.

“Trump Accounts” | Internal Revenue Service

“Trump Accounts”