Just weeks away from the official launch of “Trump Accounts,” the child savings vehicles from the 2025 tax bill, a targeted spinoff is set to roll out.
Dubbed “Fostering the Future Accounts,” this new initiative is designed to help children in foster care save for future housing, educational, and career development costs as they transition to adulthood.
First Lady Melania Trump and U.S. Department of the Treasury Secretary Scott Bessent announced in a press release that these new accounts will open on July 4, 2026.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
“Fostering the Future Accounts give foster children the same chance for asset ownership and long-term wealth building as every other American child,” Mrs. Trump remarked. “By investing in our foster youth now, we help strengthen America’s workforce, communities, and economic future.”
But because these accounts will be opened and managed by state infrastructure, states must opt in. And not everyone is on board. Read on for who qualifies and what’s holding back the remaining 27 states.
Fostering the Future Accounts for kids
The Trump “Fostering the Future Accounts” are an offshoot of standard Trump Accounts structured to help children in foster care save for long-term financial goals, like a down payment on a home or higher education expenses.
To qualify, a child must be:
- Under 18 years old
- A U.S. citizen with a Social Security number
These accounts may be opened by a state, territorial, or tribal child welfare agency. They can also be opened by designated foster parents or other legal guardians in the foster care system.
Which states are participating?
Because Fostering the Future Accounts are managed at the state level, access depends on local legislative approval. So far, governors in the following 23 states have pledged to offer the program, according to White House officials:
|
State |
Governor |
|---|---|
|
Alabama |
Kay Ivey |
|
Arkansas |
Sarah Huckabee Sanders |
|
Florida |
Ron DeSantis |
|
Georgia |
Brian Kemp |
|
Idaho |
Brad Little |
|
Indiana |
Mike Braun |
|
Iowa |
Kim Reynolds |
|
Louisiana |
Jeff Landry |
|
Mississippi |
Tate Reeves |
|
Missouri |
Mike Kehoe |
|
Montana |
Greg Gianforte |
|
Nebraska |
Jim Pillen |
|
Nevada |
Joe Lombardo |
|
New Hampshire |
Kelly Ayotte |
|
North Dakota |
Kelly Armstrong |
|
Ohio |
Mike DeWine |
|
Oklahoma |
Kevin Stitt |
|
South Carolina |
Henry McMaster |
|
South Dakota |
Larry Rhoden |
|
Tennessee |
Bill Lee |
|
Texas |
Greg Abbott |
|
Utah |
Spencer Cox |
|
West Virginia |
Patrick Morrisey |
Participating state child welfare agencies must submit IRS Form 4547 (Trump Account Election) to formally open an account for each eligible child in their custody.
Fostering the Future Accounts vs. standard Trump Accounts
Although Fostering the Future accounts function the same as a standard Trump Account — investing in stock market index funds to grow tax-deferred savings — there are some nuances in how each is opened and funded.
For instance, when a parent or guardian opens a standard Trump Account, they can claim a $1,000 federal seed deposit directly into the newborn’s account, provided their child is born between 2025 and 2028.
However, “a child welfare agency cannot elect to receive the $1,000 pilot program contribution to the child’s [Fostering the Future] Account,” as the IRS reported in a recent update. Instead, only a foster parent or other qualifying individual who anticipates caring for the child may claim this federal seed money for the child’s account.
Here’s a table highlighting several other key differences between the two types of accounts:
|
Feature |
Standard Trump Accounts |
Fostering the Future Accounts |
|---|---|---|
|
Account opener |
Parents or legal guardians |
State, territorial, or tribal child welfare agencies |
|
Eligible beneficiaries |
All eligible U.S. citizen children under 18 |
Eligible foster youth under state/territorial/tribal legal custody |
|
Core funding sources |
Parents, family members, employers, nonprofits, and other entities |
State funds, private donors, mentors, and federal benefits |
|
Annual contribution limit |
Up to $5,000 |
Up to $5,000 (inclusive of deposited survivor benefits) |
|
Must State opt-in? |
No (directly accessible to any parent nationwide via federal portal) |
Yes (requires state governors to opt in so agencies can act as custodians) |
The Fostering the Future Accounts also have unique funding methods that the federal government doesn’t offer for standard Trump Accounts.
For example, state officials can redirect existing state resources — like unused Temporary Assistance for Needy Families (TANF) block grants — into a foster child’s savings, according to the Administration for Children and Families (ACF).
Why isn’t my state on the list?
Notably, all 23 states opting into Fostering the Future Accounts are GOP-led, reflecting the partisan divide surrounding Trump Accounts, which were a key component of the 2025 Trump tax bill.
But beyond partisan lines, several other reasons exist for why states might heavily debate signing on:
- Strained budgets. State child welfare departments often depend on federal funding streams like TANF and the Social Services Block Grant (SSBG) to operate. Because most states have already finalized their budgets for the upcoming fiscal year, adding new, unplanned programs mid-cycle may be too financially constrained.
- Administrative hurdles. Fostering the Future Account documentation, including individual investment portfolios and private donations for every child, must be monitored. As such, participating state agencies are required to establish new protocols to continuously update this information, which may prove difficult given that children frequently shift between foster homes.
- Legal challenges. Legally, a state, territorial, or tribal child welfare agency may open a Fostering the Future account, but the timeline of who holds account management authority can be constantly in flux. If a child is in temporary emergency care, for instance, and then switches to kinship care or transitions between different county jurisdictions, it may be unclear who is legally authorized to update the account. (Note: the Treasury and ACF released joint guidance related to this issue.)
Ultimately, the Trump administration has set a target for all 50 states to sign on to Fostering the Future Accounts by December 2027.
However, some child welfare advocates worry that a prolonged state-by-state rollout will deepen economic disparities for children aging out of foster care — especially for children who move across state lines due to interstate adoptions or structural changes in their care.
“[State agencies] act like they don’t know if they can do it.”
Ruth Anne White, Executive Director of the National Center for Housing and Child Welfare, told independent news outlet, The Imprint.
Ruth Anne White, Executive Director of the National Center for Housing and Child Welfare, told independent news outlet, The Imprint. “But it’s right there in the Child Welfare Policy Manual [released guidance] – as clear as day.”
According to data from the National Council for Adoption, there are roughly 330,000 children in the U.S. foster care system. Statistics from the National Foster Youth Institute show that one in five foster youth face homelessness after aging out of the system, and only half secure gainful employment by age 24. Supporters of the new initiative hope these accounts will disrupt those outcomes.
Yet while supporters have framed Fostering the Future Accounts as a solution to the financial hardships facing youth aging out of care, states will need to overcome complex questions surrounding budget allocations, administrative hurdles, and bipartisan support.
Until then, foster parents and child welfare agencies will find that state lines dictate whether children in their care are eligible for these accounts.
