How Could Trump’s ‘Big, Beautiful Bill’ Advantage Parents?

 () President Donald Trump’s signature legislation is expected to deliver a range of financial benefits to parents through expanded tax credits and an investment account for newborns.

Newborns now qualify for Trump Accounts

The so-called “big, beautiful bill” now law includes investment accounts for children born between 2025 and 2028. Dubbed a “Trump Account,” the $1,000 government-funded investment is available to qualifying newborns and managed by a bank in a diversified U.S. stock index fund or an equivalent, like an exchange-traded fund.

Children can access the funds upon reaching adulthood and use them to start a business, buy a home or pay for college.

Parents can contribute up to $5,000 annually to the account, while employers can also contribute up to $2,500 tax-free, although neither is required to do so.

Unlike previous “baby bond” proposals, this program is open to families of all income levels.

What could Trump Accounts be worth?

ran two scenarios to help parents understand how this could play out:

• Scenario 1: With no additional funding
  • $1,000 seed in an ETF, averaging 10% annual return
    • In 18 years: $5,559.92
    • In 60 years: $304,481.64 tax-free at retirement
• Scenario 2: Fully funded for three years
  • $1,000 seed in an ETF, averaging 10% annual return
    • In 18 years: $74,582.76
    • In 60 years: $4,084,427.89 (tax-free)

Note, these figures are not adjusted for inflation, but they still highlight the long-term benefits.

Supporters argue the accounts will give young people a boost as they reach adulthood and teach them about the benefits of investing.

Critics argue the program doesn’t do enough for low-income families with urgent needs, and some say the government should have provided a larger endowment if the goal is to help level the playing field.

Although children born in 2025 will be eligible, benefits won’t be accessible until January 2026.

In the coming weeks, the Treasury Department is expected to provide details on which banks will manage the accounts, how to set them up, and offer educational material to guide families in selecting investments.

How are Trump Accounts different from previous ‘baby bonds’?

While baby bond concepts have circulated in both Republican and Democratic circles for decades, Trump Accounts mark the first time such a program has become law.

The key difference? The $1,000 seed from the federal government.

Financial experts note that while other savings tools, such as 529 plans, may offer more flexibility or better long-term returns, even some critics agree it’s smart to take the $1,000 and invest it.

The only other significant difference is that the Trump Account provision expires after 2028. It won’t affect existing accounts, but unless renewed, it will halt new sign-ups starting in 2029.

‘Big, beautiful bill’ increases child tax credit for some parents

The new legislation will also increase the child tax credit deduction from $2,000 to $2,200 per child. However, families that don’t earn enough to owe income tax may still not receive the full benefit or may be excluded entirely.

The measure also contains two provisions intended to help families pay for child care, which in many places costs more than a mortgage. It increases the tax credit parents receive for spending money on child care, and also expands a program that gives companies tax credits for providing child care for their employees.

Critics argue these measures may disproportionately benefit wealthier families and large corporations.

The Associated Press contributed to this report.