A new savings program from the U.S. Treasury Department is set to roll out on July 4, 2026, giving eligible children a $1,000 government-funded start.
Here’s a simple breakdown of how it works and who qualifies.
Who Gets the $1,000
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Children born January 1, 2025 to December 31, 2028
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Must be under age 18
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Account is opened by a parent or guardian
To receive the $1,000 seed money, parents must file taxes and check the box on Form 4547.
How the Account Works
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Account is in the child’s name
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Parent acts as custodian until age 18
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Government deposits $1,000 automatically
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Funds are invested in low-cost index funds for long-term growth
Contribution Rules
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Family and others can contribute up to $5,000 per year
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Contributions are optional
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Some deposits like government funds do not count toward the cap
What Happens at Age 18
Once the child turns 18:
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Account works similar to an IRA-style savings account
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Withdrawals before age 59½ may face a 10% penalty
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Exceptions include:
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Education expenses
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First-time home purchase
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Taxes Explained Simply
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Government seed money is taxable when withdrawn
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Parent contributions are tax-free when withdrawn
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Investment earnings are taxed upon withdrawal
Dates to Know
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July 4, 2026: Program officially starts
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No contributions allowed before this date
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Accounts can be opened during tax filing
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