In early December, the US Department of the Treasury announced (PDF) that enrollment in Trump accounts (530A accounts) will require families to opt in via a new tax form. If policymakers want to ensure as many children as possible can participate, they should consider the research on child development accounts and baby bonds programs that consistently shows that automatic enrollment—not opt-in—is critical to ensuring universal access and mitigating disparities rooted in administrative burden and awareness gaps.
Established through the One Big Beautiful Bill Act, Trump accounts have the potential to build long-term financial security for millions of children. Children born between 2025 and 2028 will get a $1,000 deposit into their accounts. But our new analysis shows the policy conflicts with its main goal to “give the next generation a jump start on saving” because the families who most need this help are the least likely to receive it.
Opting in to Trump accounts via a tax form creates enrollment barriers
Evidence shows opt-in designs have historically produced low participation rates, especially among low-income families. According to our analysis of the 2023 Survey of Income and Program Participation, when 529 college savings plans aren’t linked to statewide child development account programs, we see an average participation rate of 13 percent among families who have children younger than 18, but only 4 percent among those in the bottom half of income distribution. Maine’s Alfond Grant program enrolled only about 40 percent of eligible newborns under opt-in, but after switching to automatic enrollment in 2013, coverage reached nearly 100 percent.
The decision to link enrollment primarily to tax filing leaves out children who will need it most: A substantial share of low-income households owe no federal income tax, and many of them do not file at all. Researchers estimated that about 5 percent of families with children don’t file their taxes, with nonfiling concentrated among those with lower incomes. An analysis (PDF) of child tax credit recipients in 2021 found wide disparities in payment receipt by household income: Fewer than half of adults living with children in households with incomes below $25,000 who were eligible to receive payments reported receiving them.
If Trump accounts aim to expand wealth-building opportunities for families historically excluded from asset accumulation, tying enrollment to tax filing risks missing precisely the population the program seeks to serve.
Existing asset-building tax subsidies already disproportionately benefit higher-income households and higher-net-worth households. Eighty percent of the $300 billion in housing and retirement subsidies flow to the top 40 percent of earners, and 529 balances are concentrated among the wealthiest families.
If families with low and moderate incomes aren’t enrolled, Trump accounts may mirror these shortcomings—and the choice to do this via tax return means those families stand to lose out on this federal contribution.
The official website for Trump accounts does suggest that families can open an account via their 2025 tax return or through an online portal available summer 2026. But with no additional details of how that portal will operate or what funds are being designated for outreach, it’s difficult to know whether it’ll increase the number of families who successfully enroll. Experience from the child tax credit expansion suggests that finding nonfilers required high-volume outreach (PDF), even with a devoted website.
Simulating enrollment for Trump accounts
To estimate the impact of Trump accounts, we modeled what would have happened for families who currently have college-age children if a similar policy has been in place at the time of their birth. Our estimates assume only families who file federal income taxes would enroll and receive the initial $1,000 contribution.
Some filers might abstain from enrolling because of the lack of information or concerns about their immigration status, which would lower uptake among the filers. It’s also possible that the pilot funds themselves could act as an incentive and that the additional pathways to enrollment could improve uptake rates when compared with standard tax filing rates. As such, these figures should be interpreted as illustrative rather than predictive. Still, they underscore a structural problem: When enrollment hinges on tax filing, the lowest-income families—those least likely to file—stand to lose the most federal support.
Under this simulation, about 7 percent of children in families in the bottom quintile of the income distribution would not own Trump accounts, compared with only 1 percent among the two top quintiles. Because income is unequally distributed across racial and ethnic groups, the impact of 530A accounts is as well: While only about 2 percent of white households with children would forgo these accounts, about 3 percent of Hispanic households and 4 percent of Black households would.
The table below quantifies the dollars, based on the $1,000 federal contribution, missed out on by income quintile because of underenrollment. Families in the bottom income quintile would forgo nearly $600 million in potential federal contributions and returns—six times the loss for the highest quintile—because of an opt-in design tied to tax filing.
The program’s design also allows families to contribute up to $5,000 annually to Trump accounts. Though our current simulation focuses only on the initial federal contribution, evidence from similar programs suggests family contributions vary sharply by income. For example, Maine’s child development account data show a median contribution of just $790 among families earning less than $25,000, compared with $3,600 for families earning $150,000 or more. If these patterns hold under Trump accounts, the disparities we observe in account ownership will compound over time, further concentrating benefits among higher-income households.
How policymakers can ensure Trump accounts reach and serve all families
The decision to conduct opt-in enrollment via tax returns isn’t a marginal design choice; it’s a mechanism that could mean families with the least wealth miss out on billions in federal contributions. Without automatic enrollment and targeted contributions, Trump accounts risk replicating—and amplifying—the inequities embedded in existing asset-building subsidies. To prevent this, policymakers can consider the following strategies:
- shift to automatic enrollment with simplified activation pathways
- set and track enrollment benchmarks by income
- add progressive public contributions and employer/charitable targeting to low-income cohorts
- fund outreach and administrative simplification to mitigate churn-like barriers
- categorically exclude balances in Trump accounts from calculations for means-tested benefits
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