The One Big Beautiful Bill Act created a new savings account for kids, nicknamed a Trump account. It is not a 529 replacement. It is not a miracle. It is one more bucket, with its own rules.
Who it is for
A child under 18. The account is invested and grows without annual tax on the gains. Withdrawals are generally locked until the child turns 18, with narrow exceptions.
What goes in
Employers can put in up to $2,500 per year for an employee's child, and that amount is excluded from the employee's income. For the business, it is a benefit expense. Individual contributions are capped, indexed, and the mechanics are still being written into IRS guidance. Do not fund on rumor. Check the current IRS instructions before you write the check. Newborns in the federal pilot receive a $1,000 government contribution.
If you own the business
An S-Corp or partnership owner can fund contributions for employees' children as a benefit, not a bonus. Worth pricing out if you are competing for staff in LA. Stack it. The annual gift tax exclusion and a 529 still do more heavy lifting for tuition. Run payroll and ownership facts past your CPA first. Family employment rules trip people up.
Trump account vs 529
A 529 wins on education: state deduction, tax-free qualified withdrawals, high funding room. A Trump account is more flexible on what the money eventually pays for. Most families I see should max the 529 for tuition and treat the Trump account as a small, long-horizon add-on.
The honest read
This is a modest account with a long lock-up. Useful, not transformative. Set it up because it fits your plan, not because of the name on it.
If you have kids and a closely held business, a short conversation is usually enough to see whether this belongs in your 2026 plan. Book a consultation.