The “Big Beautiful Bill” includes a MAGA Baby Savings Account for Newborn Babies!
It aims to provide a financial head start for children by establishing investment accounts seeded with a one-time $1,000 federal contribution at birth.
Everything you need to know…
🔴 Key Features of MAGA Savings Accounts:
The federal government would deposit $1,000 into a tax-advantaged savings account for each eligible child. The funds are intended to grow through investments, potentially in U.S. equities, until the child reaches 18.
- Contributions: Parents, relatives, friends, or employers can contribute up to $5,000 annually per child using after-tax dollars. These contributions grow tax-deferred, but withdrawals are subject to capital gains tax.
🔴 Usage Restrictions:
- Funds cannot be accessed until the child turns 18.
- At 18, up to 50% of the funds can be withdrawn for specific purposes: higher education, training programs, small business loans, or first-time home purchases.
- At 25, the account holder can withdraw the full balance, but only for the same limited purposes.
🔴 Tax Benefits:
The accounts are described as “exempt from taxation” in some sources, implying tax-free growth on investments, though withdrawals may incur capital gains tax. The structure resembles a Roth IRA or 529 plan but with unique restrictions.
🔴 BABY SAVINGS ACCOUNTS :
For Babies born before Jan 1, 2024, under 8 years old, with at least 1 parent with valid SS number.
Like 401K for kids. $5,000 per year can be put into the account with full access at age 30. Great way to give kids a good start in life. Helps parents think again about having more children since financial security big reason they don’t.
🔴 Eligibility
To qualify for a MAGA Savings Account, a child must meet the following requirements:
- U.S. Citizenship: The child must be a U.S. citizen “at birth.”
- Social Security Number (SSN): The child must have an SSN, and at least one parent (or the taxpayer claiming the child as a dependent) must provide a work-eligible SSN. If the parent is married, their spouse may also need a work-eligible SSN.
- Birth Date: The program applies to children born between January 1, 2025, and December 31, 2028, as part of a pilot program. Some sources mention an age cap, typically children under 8 years old at the program’s start (January 1, 2026), though this varies across drafts.
- Parental Option: Parents can accept or decline the account for their child.