Technical Analysis of Draft Form 4547 and the Trump Account Election

The Internal Revenue Service has released a draft version of Form 4547, Trump Account Election(s), scheduled for release in December 2025. This form facilitates the election to establish a "Trump Account"—statutorily defined as a type of traditional individual retirement account (IRA) subject to distinct regulatory modifications during a designated "growth period". For tax professionals preparing for the 2025 tax season and beyond, understanding the specific elections, contribution limits, and filing procedures associated with this new instrument is essential.

Operational Definition and the Growth Period

While the Trump Account is classified as a traditional IRA, it operates under special rules during a "growth period," which commences on the date the account is established and terminates on December 31 of the year prior to the calendar year in which the beneficiary attains age 18. During this period, the account is subject to unique constraints: funds must be invested in eligible investments (generally mutual funds or ETFs tracking U.S. company indices), distributions are restricted, and no deduction is allowed under Internal Revenue Code section 219 for contributions.

Once the growth period concludes, the account generally reverts to standard traditional IRA rules, potentially subjecting future distributions to the section 72(t) 10% additional tax unless exceptions apply.

Authorized Individuals and Priority Rules

Practitioners must identify the correct "authorized individual" to sign Form 4547. The instructions establish a hierarchy of individuals permitted to make the election to open the initial account: legal guardian, parent, adult sibling, and grandparent, in that order of priority.

If the election includes a request for the "Pilot Program Contribution" (discussed below), the definition of an authorized individual shifts. In this context, the authorized individual must be a person who anticipates that the account beneficiary will be their "qualifying child" for the tax year in which the election is made. By signing the form, the individual represents under penalties of perjury that they are authorized to open the account.

The Pilot Program Contribution Election

A core function of Form 4547 is electing to receive a $1,000 "Pilot Program Contribution" from the U.S. Treasury. To qualify for this federal contribution, the child must meet specific criteria outlined in the draft instructions:

  • Born after December 31, 2024, and before January 1, 2029.
  • A U.S. citizen with a valid Social Security Number (SSN) issued prior to the election date.
  • Anticipated to be the qualifying child of the authorized individual for the election year.

The Treasury Department states that no Pilot Program Contributions will be deposited earlier than July 4, 2026.

Contribution Limitations and Section 128

Tax professionals should note that the Trump Account creates a separate contribution limit distinct from other IRAs. During the growth period, the aggregate annual limit for contributions is generally $5,000, subject to cost-of-living adjustments after 2027.

This limit encompasses "Section 128 employer contributions" (contributions not includible in the employee’s gross income) and contributions from other sources. Section 128 employer contributions specifically are capped at $2,500 annually. Notably, the $1,000 Pilot Program Contribution and qualified general contributions from government entities or 501(c)(3) organizations do not count toward the annual limit.

Filing Procedures and Timing

The draft instructions indicate that the most efficient method for filing Form 4547 is to include it with the authorized individual’s e-filed current-year income tax return. For the initial rollout, this would likely accompany the 2025 tax return.

If the form is not filed with the tax return, it may be filed separately on paper at the address designated for the taxpayer’s return. However, practitioners must adhere to a strict prohibition: Form 4547 must not be attached to Form 1040-X (Amended U.S. Individual Income Tax Return). Furthermore, taxpayers should not amend a Form 1040, 1040-SR, or 1040-NR solely to attach Form 4547.

The IRS anticipates launching an online portal at trumpaccounts.gov beginning in the middle of 2026, which may allow for online elections. Contributions to these accounts generally cannot be made prior to July 4, 2026.

Form 4547 Structure and Data Requirements

The form is divided into four primary parts:

  • Part I: Parent/Guardian or Other Authorized Individual Information: This section designates the "responsible party" for the account. It requires standard identification including name, address, and SSN. If the authorized individual has a foreign address, specific formatting for province and postal codes is required.
  • Part II: Child’s Information: The form accommodates elections for up to two children; if more are required, additional forms must be attached. This section requires the child’s name, SSN, date of birth, and relationship to the filer. Line 6 requires a mandatory checkbox certifying the filer is authorized to open the account.
  • Part III: Pilot Program Contribution Election: This section contains Line 7, a checkbox used to formally request the $1,000 federal contribution. If a child is not eligible for the pilot contribution (e.g., born outside the 2025–2028 window), this box should be left blank, but the form may still be filed to open the account.
  • Part IV: Consent to Disclose Information: By signing, the authorized individual consents to the disclosure of the fact that a Trump Account has been established to other individuals who may have also been eligible to make the election (e.g., another parent). This also authorizes the Treasury and its agents to create and maintain the account.

Draft Forms and Instructions

Practitioners are advised that the current documents are drafts and not for filing. The IRS cautions that while the provisions of the One Big Beautiful Bill Act that created these accounts are incorporated into posted drafts, legislation or unexpected issues could necessitate further revisions.

Prepared with assistance from NotebookLM.