Exploring the New Form 4547: A Guide to Trump Accounts and Tax Implications

Overview of Form 4547 and Its Purpose

• Form 4547 is used to establish a Trump account for the exclusive benefit of a child who is eligible for such an account.
• It allows taxpayers to make an election for a $1,000 pilot program contribution from the U.S. Treasury to a child’s Trump account, if they are eligible.
• The form is part of a program aimed at encouraging savings for children's future education or other needs.
• For more information, including eligibility and the process for making these elections, taxpayers are directed to visit trumpaccounts.gov.

What Is a Trump Account?

• A Trump account, as described in Form 4547, is a type of traditional individual retirement account (IRA) established for the exclusive benefit of a child.
• The child listed in Form 4547, Part II, is the owner of this account, also referred to as the "account beneficiary." Parents, guardians, or other authorized individuals can elect to establish a Trump account for eligible children.
• If the child was born after 2024 and before 2029, is a U.S. citizen, and meets certain other requirements, the authorized individual may also elect to receive a $1,000 pilot program contribution to the child’s Trump account.
• Both elections can be made on Form 4547 and filed at the same time as the authorized individual’s 2025 income tax return.

Key Sections of Form 4547: Important Parts and Their Coverage

• Part I - Authorized Individual’s Information: This section is designed to collect basic information about the taxpayer and the tax year in question. It serves as the introductory section of the form.

  • Name: The full name of the individual making the election.
  • Social Security Number (SSN): The SSN of the individual.
  • Address: The mailing address of the individual.
  • Relationship to Child: The relationship of the individual to the child (e.g., parent, guardian).

• Part II - Child’s Information:

  • Name and SSN: Ensure these match the child’s social security card.
  • Relationship: Enter the child’s relationship to the authorized individual (e.g., son, daughter).

• Part III - Pilot Program Contribution Election: For each child, check the box if the child is eligible for, and you want the child to receive, a pilot program contribution.

• Part IV - Consent to Disclose Information: By completing and signing Form 4547, you authorize the IRS, the Treasury, and their agents to create and maintain a Trump account for the eligible child(ren) listed on the form. You also allow them to disclose that such an account has been created to any parent, guardian, or authorized individual who is eligible to request the account.

  The form is only valid if it is properly signed and dated. Even if someone else prepares the form, you remain responsible for its accuracy. If a representative signs on your behalf, a power of attorney (Form 2848) must be attached authorizing them to do so.

  • Paper filing: Must include a handwritten signature; electronic or typed signatures are not accepted.
  • Electronic filing: Signature requirements depend on the tax software or tax practitioner used.

  If a paid preparer files Form 4547, they may complete the Paid Preparer section.

Common Mistakes to Avoid on Form 4547

• Electronic Filing Requirements: Ensure you follow the specific instructions provided by your tax software or tax practitioner when signing Form 4547 electronically. Incorrect electronic signatures can lead to processing delays.
• Paper Filing Instructions: If filing Form 4547 on paper, mail it to the correct address specified for your tax return year. Do not attach it to Form 1040-X or amend Form 1040, 1040-SR, or 1040-NR to include it.
• Declaration Accuracy: Under penalties of perjury, ensure that all names, addresses, and taxpayer identification numbers are accurate and correctly identify the recipients of payments.
• Penalties for Improper Use: Be aware that improper use of Form 4547 can lead to IRS challenges and potential penalties, similar to those for incorrect use of Form 4852.

Helpful Tips for Completing Form 4547

• Ensure that all sections are completed accurately, especially Part III—Pilot Program Contribution Election Paid Preparer Section if applicable.
• Follow specific instructions for electronic filing, as requirements differ based on whether you use tax software or a tax practitioner.
• Verify that all necessary information is provided to avoid rejection or suspension of the form.

Source

• For more up-to-date information visit https://www.irs.gov Government website.
• For the most accurate and detailed information regarding which schedules and forms are necessary for your specific tax situation, refer to the Instructions for Form 4547 or consult a tax professional.