Trump Accounts, also known as 530A accounts, are a new type of tax-deferred investment account that can be opened at birth in which individuals, along with their employers, can contribute a maximum of $5,000 per year.
Families with children under 18 can open and save with a Trump Account starting July 4, 2026. For children born between 2025 and 2028, a $1,000 deposit from the federal government is available. Other children may be eligible for contributions from other sources such as the Michael & Susan Dell Foundation.
Understanding the differences between Trump Accounts, PA 529, and Keystone Scholars can help families make informed decisions about planning for the future.
The comparison below highlights how Trump Accounts, PA 529, and Keystone Scholars each work—including eligibility, tax benefits, investment rules, and how families can use the funds. This overview is designed to illustrate how these programs complement one another and how PA 529 is a flexible, tax-advantaged way to save for education.
Trump Accounts vs. PA 529 vs. Keystone Scholars
Category |
Trump Accounts |
PA 529 (GSP & IP) |
Keystone Scholars |
Program type |
Federal account structured as a special IRA for minors during a “growth period” before age 18, after which it becomes a traditional IRA. |
State sponsored qualified tuition program (Section 529); PA offers two plans (Guaranteed Savings Plan; Investment Plan). |
State administered at-birth scholarship account for all children born to PA residents. |
Who’s eligible |
U.S. citizens under age 18. |
Anyone can open an account. For the GSP, the account owner or beneficiary must be a PA resident. |
Every child born to (or adopted by) PA residents since 2019. |
Seed deposit |
$1,000 for children born in 2025 through 2028. Parent must make an election to receive the funds. |
None |
$100 at birth; automatic deposit. |
Who can contribute & limits |
Individuals may save up to $5,000/year. Employers may add up to $2,500/year which counts toward the $5,000 limit. |
Anyone can contribute. No federal annual limit, but PA has a lifetime limit for each child. Gift tax rules apply. |
Families cannot add to the account. Instead, they open and save in a linked companion PA 529 account. |
Other deposits available |
Certain government & charities may add “qualified general contributions” such as the Dell Foundation which has pledged $250 for children born between 2015 and 2024 living in ZIP codes with a median income < $150,000. |
Gift cards and online gifting are available. PA 529 also runs periodic promotions. |
Charities and community organizations may add deposits and offer incentives through the Community Scholarship Partnership Program. |
Employer Tax Credit |
No federal tax credit for employer contributions. |
Employers may claim a 25% state tax credit for matching contributions of up to $500 per employee per tax year. |
N/A |
Investment options (pre‑18) |
Low-cost U.S. stock index funds. |
Broad set of options including target enrollment date and risk-based portfolios in the IP and tuition-based credits in the GSP. |
N/A. Treasury invests the funds. |
Access timing/withdrawals |
Generally no withdrawals until the year the child turns 18; after that traditional IRA rules apply. |
Withdrawals any time for qualified education expenses (see eligible use); non‑qualified withdrawals trigger tax + penalty. |
Funds can be used from age 18 until age 29 for qualifying post-high school education and training expenses. |
Eligible uses |
After 18, IRA rules apply; the law allows uses such as education, first‑home costs, or starting a small business—but taxes may apply. |
College and career expenses including tuition, fees, books, room/board, computers, apprenticeships, certain credentials, and some student loan repayments. K-12 expenses up to $20,000/yr. |
Post-high school education & training. Same as PA 529 except K-12 expenses are excluded. |
Federal taxes |
Tax‑deferred growth. Employer contributions are tax-free to the employee. After 18, withdrawals follow traditional IRA tax rules (generally taxable; penalties may apply to early non‑qualified withdrawals). |
Tax‑deferred growth; tax‑free withdrawals for qualified section 529 education expenses. |
Scholarship benefit is tax-free; withdrawals for qualified section 529 education expenses are tax-free. |
Pennsylvania state taxes |
State tax treatment is still being determined. |
PA taxpayers can deduct contributions up to $19,000/beneficiary (single filers) or $38,000 (married filing jointly) in 2026. Withdrawals for education are tax-free. |
Does not affect PA state financial aid or cause an income tax liability. Withdrawals for education are tax-free. |
Beneficiary flexibility |
One account per child; not transferrable to another beneficiary. Rollovers permitted; after 18, becomes the child’s IRA (RMDs & IRA rules later apply). |
No restriction on number of accounts per child. Can change beneficiary to another family member; broad rollover flexibility within 529 rules, including a rollover to a PA ABLE account and up to $35,000 to a ROTH IRA. |
One account per child; not transferable, but families can save for siblings in separate PA 529 accounts. |
Financial aid impact |
Still unclear pending federal & FAFSA guidance; treat as evolving. |
Federal: Generally counted as a parent asset (favorable treatment vs. student assets). (Follow current FAFSA methodology.) |
Designed not to impact aid; families typically save in PA 529 with the same parent‑asset treatment. |
Note: Details for Trump Accounts are still being finalized; the information in this chart reflects the IRS’s initial notice and proposed regulations.
