In the United States, Ted Cruz and Donald Trump have recently introduced the One Big Beautiful Bill. On the part of the Treasury Department, together with the S&P 500, they are presenting an assistance of $1,000. In order to have access to the distribution of this income, it will be necessary to have Social Security. Thus, it should be emphasized that the Internal Revenue Service (IRS) has to finish developing the last points that have to be taken into account. Read on for the latest updates on assistance.
The president’s new initiative
A new initiative pushed by President Donald Trump and Republican Senator Ted Cruz could change the financial future of millions of families in the United States. Under recently signed legislation, all babies born between 2025 and 2028 will receive a one-time $1,000 payment from the federal government.
The measure is part of the economic plan called “One Big Beautiful Bill”, signed by the president last July 4, and seeks to encourage savings and investment from birth.
What does the aid signed by Donald Trump consist of?
The program establishes that each baby born in the United States during Donald Trump’s second term will benefit from the automatic opening of a “Trump Account”, an investment account backed by the Treasury Department or the child’s parents themselves.
This account will be primarily intended to support the long-term education, access to housing and overall financial health of the children. According to financial experts, the structure is similar to a hybrid individual retirement account (IRA).
Requirements to receive the $1,000 Trump bonus
To be eligible for payment and account opening, the following requirements must be met:
The baby must be born in the United States between 2025 and 2028.
Must have a Social Security number.
The parents must demonstrate work eligibility with their Social Security number.
No income limits are required, making the measure universal among U.S. families.
How do Trump Accounts work?
The accounts will be designed to invest money in low-cost mutual funds, such as index funds that track the performance of the S&P 500. The intention is that the investments will grow over time, so they can take advantage of the power of compound interest.
Parents, family members or even employers will be able to make additional contributions of up to $5,000 per year. Of these, up to $2,500 contributed by employers will not be considered taxable income.
However, not everything is immediate: the funds cannot be withdrawn before the beneficiary turns 18, and then they will be treated as a traditional IRA account.
“A retirement account for children”
But because Trump accounts are also restricted to stock funds, that means that savers won’t be able to benefit from rebalancing with less risky fixed-income options, such as bonds or cash. After age 18, the “eligible investment” rules may no longer apply and the beneficiary can invest the funds in any way allowed within an IRA, according to Henry-Moreland.
Republican lawmakers have said Trump accounts will introduce more Americans to wealth-building opportunities, particularly by investing in the stock market. Sen. Ted Cruz, R-Texas, who spearheaded the effort, said in a May “Squawk Box” interview that the accounts give children “the miracle of the compound growth, the ability to accumulate wealth, which is transformational.”
Other effects of the law
In addition to the newborn bonus, the “One Big Beautiful Bill” also contemplates adjustments in Social Security payments, which could translate into up to $12,000 extra per year for certain beneficiaries in the United States, according to requirements yet to be defined.
However, some individuals are also expected to face increases in their monthly tax payments or tax adjustments, although the Internal Revenue Service (IRS) has yet to issue detailed guidance on how the entire system will operate.