Recently, President Donald Trump signed a key piece of legislation. The “Trump megabill,” also known as the “One Big Beautiful Bill” (OBBB), is expected to impact millions of taxpayers, like you, across the country.
Among the new law’s many provisions are benefits for parents, like a boosted federal child tax credit and an enhanced adoption tax credit. But what provisions specifically address your child’s finances?
Some may help your child better afford education, including tuition expenses or school choice. Still others introduce a new type of “kid savings account.”
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Here are three ways the Trump megabill will impact your child’s finances.
Related: 10 Tax Breaks for Middle-Class Families Claiming the Standard Deduction
1. Trump accounts for children
Perhaps you’ve heard about the new type of savings accounts introduced in the OBBB: “Trump Accounts.” Supporters say these are designed to help save annually for a child’s future homeownership, educational, and even entrepreneurial needs.
According to the OBBB, Trump Accounts will:
- Allow parents, relatives, and others to contribute after-tax dollars (up to $5,000 per year) in a child’s name.
- Permit savings to grow tax-deferred until the child reaches 18.
- Give children born in the United States between 2025 and 2028 seed money from the federal government in the amount of $1,000 in their accounts.
Supporters of Trump Accounts say eligible children can have one opened for them as early as July 2026.
As Kiplinger reported, multiple companies may already be on board in terms of voicing support for Trump Accounts. CNBC reported that executives from Dell, Uber, and Goldman Sachs, to name a few, attended the Trump administration's "Invest America Roundtable” held at the White House last month.
While several companies reportedly expressed support for the newborn investment program, Dell reportedly pledged a $1,000 match for its employees' children into Trump Accounts under the new tax provision.
For more information, check out Kiplinger’s article, The GOP Wants to Auto-Enroll Your Child in a 'Trump Account' for Savings.
2. 529 education plan for school students
The OBBB also changed the rules around 529 plans for kids. Here’s a quick overview of some of those changes:
- Currently, parents can withdraw up to $10,000 annually, tax-free, for K-12 tuition expenses. Starting tax year 2026, under the OBBB, individuals will be able to withdraw up to $20,000 annually.
- Parents can also deduct more types of K-12 expenses. For instance, books and standardized test fees (like the SAT or ACT) are “qualified expenses” under the new law for 529 plans, as are online learning materials, certain tutoring fees, and dual enrollment fees for college courses taken in high school.
- More post-secondary expenses are included as qualified expenses under the new law. For example, the OBBB allows withdrawals for workforce credentials programs and continuing education courses.
The last point may be particularly advantageous if your child decides to change careers post-college or needs a certificate to enter the workforce.
But when it comes to education savings accounts, there’s more than just 529 plans or even Trump accounts. Coverdells may be used if you meet certain income limits. These special savings accounts allow you more control over your investment options compared to 529s.
Check out Kiplinger’s report for more details: Coverdell ESAs vs. 529 Plans: Which Should You Choose?
3. K12 expenes: Private school vouchers
Another change in the OBBB involving children is a provision dealing with private school voucher tax breaks. These voucher programs use publicly funded scholarships that allow students to attend private schools.
The OBBB provides a dollar-for-dollar tax credit for donations made to private K-12 voucher programs.
- The donation must go to a “Scholarship Granting Organization” (SGO) to count for the tax credit.
- SGOs are nonprofit organizations that distribute donations to students through scholarships, which can pay for private school tuition, books, and homeschooling costs.
- The tax credit is worth up to $1,700 of adjusted gross income.
While the new provision promotes private school choice, some states won’t get the tax credit.
According to the National Education Association, private school vouchers have appeared on state ballots 17 times and were rejected by voters. Colorado, Kentucky, and Nebraska are just a few of the recent states that did not approve.
For more information on who would qualify for the scholarships, check out Kiplinger’s report, 'Unprecedented' Private School Voucher Tax Credit in Trump's Megabill.
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