What can Trump Account money be used for?

The child generally cannot take the money out while the childhood rules apply, and those rules end by age 18.

The IRS says amounts generally cannot be withdrawn before January 1 of the year the child turns 18. After that date, the account follows ordinary traditional IRA rules. The program website says the money stays unavailable until the child turns 18, and that the account becomes a traditional IRA in the child's name then. January 1 of that year and the birthday are not always the same day, so this does not name one unlock date. The child owns the account the whole time.

A personal gift is not an income-tax deduction. Growth is taxed when money comes out, not each year.

During the childhood period, the IRS does not allow an IRA deduction for a contribution. Money a person puts in becomes the child's basis, so that part is not taxed again on the way out. The $1,000 deposit, employer contributions, and charity or government gifts do not become basis. Those amounts, and the earnings, are taxed as ordinary income when they are withdrawn. If earnings come out before age 59½, the IRS can add a 10% tax. Once ordinary IRA rules apply, that extra 10% does not apply to qualified higher-education expenses, or to a qualified first-home purchase of up to $10,000. Income tax can still apply. This is a plain summary, not tax advice.

Parents, family, friends, and the child can all contribute.

The program says anyone can contribute to a claimed account, up to the shared yearly cap. The child does not need earned income for those childhood contributions. Employers, charities, and state or local governments can also contribute under their own rules.