How the bill changes contribution rules
Trump accounts, created by the One Big Beautiful Bill Act, are tax-favored investment accounts for children under 18. While family, friends, and employers can contribute up to a combined $5,000 annually, a special rule under IRC § 530A(f) allows for unlimited “qualified general contributions” from government entities and certain tax-exempt organizations.
Currently, these unlimited contributions can only be made to a “qualified class” of children, a designation based on age or geography. Because children in foster care are not a distinct qualified class, states and philanthropic groups wanting to make targeted investments for them face contribution limits.
To dig deeper, visit the original article on the Thomson Reuters blog.