Dell $6.25B for Trump Accounts; $5,000 annual cap and contributor rules detailed
Michael and Susan Dell pledged $6.25 billion to back the Treasury‑run “Trump Accounts,” putting about $250 into each qualified child’s account to spur enrollment of millions of U.S. children (targeting many under‑10 and in lower‑income ZIP codes), while the Treasury will separately seed $1,000 for U.S. citizens born Jan. 1, 2025–Dec. 31, 2028; accounts — scheduled to open July 4, 2026 and claimed via IRS Form 4547 — are tax‑deferred, privately managed but invested in low‑cost index funds. Annual contribution rules cap tax‑deferred additions at $5,000 per child (indexed after 2027) with eligible contributors including parents, employers (up to $2,500 tax‑free within the cap), grandparents, friends and charities (some government/nonprofit grants excluded from the cap); withdrawals at 18 may be used for education, a first home, or starting a business, with penalties for non‑qualified early distributions.
📌 Key Facts
- Michael and Susan Dell pledged $6.25 billion to encourage families to claim the new “Trump Accounts,” committing to deposit $250 into qualifying children’s accounts — a pledge aimed at roughly 25 million children under age 10 who live in ZIP codes where median family income is under $150,000.
- The U.S. Treasury will seed Trump Accounts with a one‑time $1,000 federal contribution for U.S. citizen children born Jan. 1, 2025–Dec. 31, 2028 who have Social Security numbers; all children under 18 can have accounts, but only those 2025–2028 births receive the $1,000 seed.
- The accounts are Treasury‑run but administered by private firms (Treasury’s “designated financial agent” initially), with funds required to be invested in authorized low‑cost, equity index‑tracking mutual funds/ETFs and annual fees capped at about 0.1%; accounts may be transferable later to a parent’s brokerage.
- Trump Accounts are tax‑deferred; qualified withdrawals at age 18 can be used for higher education, a first home purchase, or to start a business, while non‑qualified withdrawals before age 18 generally incur penalties.
- Contribution rules: up to $5,000 per child per year (indexed after 2027); eligible contributors include parents, grandparents, employers, family friends and charities (employers may contribute up to $2,500 tax‑free within that cap); contributions from cities, states, tribal governments and many qualified nonprofits generally do not count toward the $5,000 cap.
- Enrollment and timing: parents/guardians must create/claim accounts (there is no automatic enrollment) — opening uses IRS Form 4547 with online enrollment expected by mid‑2026; Treasury will send activation instructions in May 2026 and private contributions can begin on the planned program launch, July 4, 2026.
- Operational and equity concerns: experts warn that lack of automatic enrollment and remaining operational questions (including who will actually open or hold accounts) could cause many eligible families to miss out; the White House projects wide possible outcomes — from roughly $18,100 with no added contributions to nearly $1.1 million by age 28 with maximum contributions.
📊 Analysis & Commentary (3)
Giving Tuesday reminds us that all gifts, small and large, can change the world
"A pro‑Giving Tuesday commentary argues that generosity — whether small or large — redeems consumerism, fills gaps left by institutions, and should be a daily, humble practice rooted in faith and service, noting big philanthropic pledges (e.g., the Dells) but emphasizing that modest acts of giving also change lives."
Billionaire Cash for Kids and Capitalism
"The WSJ editorial praises Michael and Susan Dell’s $6.25B pledge to seed savings accounts for children as a preferable, ownership‑preserving complement to the federal 'Trump Accounts,' while warning Democrats may politicize or expand the program into redistribution and urging that accounts remain individually owned and invested in broad index funds."
You can afford a tradlife
"The piece argues that a carefully designed child‑savings program (like the Treasury 'Trump Accounts' backed by the Dell pledge) and modest, credible policy changes can make a traditional family life affordable for many, while warning against relying on optimistic tariff revenue claims and urging pragmatic, progressive design choices."
📰 Sources (8)
Trump accounts just got a massive promised donation. Here’s what to know about who qualifies
New information:
- Dell pledge eligibility details: $250 deposits will go to children 10 and younger born before 2025 who live in ZIP codes where median family income is below $150,000.
- Enrollment mechanics: parents will open accounts via IRS Form 4547, with online enrollment expected by mid‑2026.
- Account administration: Treasury’s “designated financial agent” will manage accounts initially, with an option to transfer to a parent’s brokerage later.
- Program timing reaffirmed: contributions can be made beginning next Independence Day.
- Means‑testing clarification: account balances will not count against asset limits for means‑tested benefits, per experts/government clarifications.
- Use and penalties reiterated: withdrawals before age 18 incur penalties unless used for qualified purposes such as higher education or a first‑home purchase.
- Equity/uptake concern: experts warn lack of automatic enrollment could cause millions of eligible families to miss out.
Here's what to know about the Dell donation and how Trump accounts for kids will work
New information:
- Trump Accounts will allow up to $5,000 in annual contributions per child.
- Eligible contributors include parents, employers, grandparents, family friends, or charities.
- CBS reiterates the accounts are tax-deferred and invested in low-cost equity index funds.
Should you open a Trump account for your child? Here's what experts say.
New information:
- Eligibility specifics: U.S.-citizen children born Jan. 1, 2025–Dec. 31, 2028 qualify for a one-time $1,000 federal seed; families can open accounts for children under 18 but without the $1,000 grant.
- Opening process: parents/guardians use IRS Form 4547 to open a Trump Account and request the $1,000 contribution.
- Timeline: accounts can be opened in early 2026; Treasury will send activation instructions in May 2026; private contributions can start July 4, 2026.
- Contribution limits: up to $5,000 per child per year (indexed after 2027); employers may contribute up to $2,500 tax-free within that cap.
- Third-party funding: contributions from cities, states, tribal governments, and qualified nonprofits generally do not count toward the $5,000 cap.
- Investment constraints and fees: funds must be invested in authorized index-tracking mutual funds/ETFs (mostly U.S. equities) with annual fees capped at 0.1%.
- Expert perspective: financial planners recommend taking the $1,000 federal seed but caution that personal contributions may be less advantageous than 529 or custodial accounts due to caps and tax treatment.
Michael and Susan Dell commit $6.25 billion for investment accounts for kids
New information:
- Eligibility targeting: children age 10 or under, born before Jan. 1, 2025, with Social Security numbers, in ZIP codes where median income is under $150,000.
- Coverage goal: the gift aims to reach nearly 80% of children in the eligible age group across 75% of U.S. ZIP codes.
- Parents must create/claim the accounts; Susan Dell highlighted July 4, 2026 as the date to claim.
- Clarification: all kids under 18 can have a Trump Account, but only babies born 2025–2028 get the $1,000 Treasury seed.
- White House projection cited: max contributions could yield nearly $1.1 million by age 28; with no added contributions, about $18,100.
- Operational uncertainty: Charles Schwab says it's not yet clear who will open the accounts or where they will be held.
WATCH LIVE: Trump makes announcement on ‘Trump accounts’ for babies as Dell family pledges more than $6 billion
New information:
- AP/PBS says the announcement event is scheduled for 2 p.m. ET in New York and provides a live stream.
- Quotes from Michael and Susan Dell framing the gift as, in their view, the largest single private commitment made to U.S. children and intended to build 'hope and opportunity.'
- AP characterization that the pledge targets '25 million American children under 10' to incentivize claiming accounts, alongside reiteration that Treasury will deposit $1,000 for children born 2025–2028.
- Additional quote and context from Brad Gerstner (Invest America Charitable Foundation) on using the government platform to 'unlock major giving' and include families in stock-market upside.
Michael and Susan Dell donate $6.25B to encourage families to claim 'Trump Accounts'
New information:
- Treasury plans to launch 'Trump Accounts' on July 4, 2026, aligned with the U.S. semiquincentennial.
- The $6.25B pledge is by Michael and Susan Dell and will deposit $250 into each qualified child’s account (about 25 million children under age 10).
- Accounts are Treasury-run but managed by private companies; funds must be invested in an index fund.
- At age 18, withdrawals can be used for education, a home purchase, or to start a business.
- Quotes from Michael and Susan Dell framing the gift and its goals; announcement timed to GivingTuesday.
- Brad Gerstner and Invest America Charitable Foundation are assisting Treasury with program launch.
Michael Dell Donates $6.25 Billion to ‘Trump Accounts’ for Children
New information:
- Treasury will contribute $1,000 to each eligible child’s account.
- Eligibility window: children born between Jan. 1, 2025 and Dec. 31, 2028 who are U.S. citizens with Social Security numbers.
- Confirms the accounts are tax‑deferred and were created by a tax plan passed by Congress over the summer.