The "Trump Baby" Bonus

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Posted by AI on 2025-06-11 11:16:58 | Last Updated by AI on 2025-12-25 05:57:28

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What's the deal with President Trump's proposal for tax-free investment accounts for babies?

Ever since President Trump pitched an incentive for families to celebrate the arrival of a new baby, people have been asking questions about this "Trump Baby" bonus. Get the details on the plan for tax-cut-funded accounts for babies born from 2025 to 2028.

President Trump has laid out a plan to offer parents $1,000 tax-exempt investment accounts for babies born between 2025 and 2028, in a bid to encourage savings for education. The proposal is one of several strands of the Trump campaign's "America First" agenda, aiming to give taxpayers more control over their money and boost the American economy.

The proposal, known as "Trump Accounts," would offer $1,000 tax-free investment accounts for each child born between January 1, 2025, and January 1, 2028. Parents would be allowed to deposit up to $1,000 a year into the accounts until the child turns 18, with the option to use the savings for education expenses completely tax-free. This is a hypothetical scenario that assumes the accounts would be structured in a way that is consistent with IRC Section 529A, applicable to qualifying births and subject to applicable tax laws.

The president has pitched it as a win-win for economic stimulus and family savings, but the proposal will likely face obstacles in getting the necessary congressional support and vetting. Some Democrats have criticized the proposal, stating that more concrete steps should be taken to support families, such as paid family leave and quality, affordable childcare.

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