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Trump Account vs 529 vs Roth IRA vs UTMA: Which Leaves Your Child More After Tax, in Your State

Tax year 2026 rulesChecked Runs in your browser; nothing you type is sent anywhere

Put the same savings into each account and the amount your child can spend is different, because each account is taxed differently. A 529 plan is tax-free when it pays for college, and 37 states and DC give a deduction or credit for contributions. A Trump Account can receive money you did not save (a $1,000 federal deposit for children born 2025 through 2028 and up to $2,500 a year from an employer), but its growth is taxed as ordinary income when it comes out. A custodial Roth IRA needs a child with earned income. A UTMA account is taxed every year, at capital gains rates. This calculator runs all four with the federal kiddie tax and your state's own rules, for college, for any other use at 18, and for money left to grow until the child retires.

Example with the settings below (New York, married couple earning $120,000, a newborn, $5,000 a year, 6% return, 2.5% inflation, no child earnings): for college, the 529 plan leaves $116,535 in today's dollars including New York's tax savings, a UTMA account $107,571 and a Trump Account $102,053. Used at 18 for something other than education, the order changes: UTMA $99,324, 529 $90,034, Trump Account $89,813. Left alone until 60 and spent from 60 to 69 by a child who earns $50,000 a year, UTMA leaves $405,322, the 529 $385,989 (after moving what the rules allow to a Roth IRA) and the Trump Account $353,963. With no earned income a Roth IRA is not possible, so its column shows the same money in a UTMA account.

Whether each state taxes a Trump Account at all is on our state-by-state table, with the law behind each answer. Treasury opened the accounts itself on October 1, 2026: “With automatic enrollment complete, every eligible child under the age of eighteen with a valid Social Security number now has a Trump Account” (U.S. Treasury, October 1, 2026). A parent or guardian claims it; until then BNY holds it, and once claimed it is at Robinhood. How to claim it is on our claim page, and which firms say they will accept transfers is on a separate page.

Your numbers

Saving runs each year until the year before the child turns 18.
The same amount goes into each account. What an account cannot take goes into a UTMA account in that column.
Up to $2,500. It counts toward the $5,000 yearly limit.
Parents' filing status
Used for the kiddie tax, the 529 deduction and the tax on a 529 cashed out.
A custodial Roth IRA can take no more than this (and $7,500).
Options
Results are in today's dollars.
Part of the return; taxed each year in a UTMA account.
In today's dollars, from 18 to 69. It sets the tax on a taxable account and on Trump Account withdrawals, and how much of a 529 can move to a Roth IRA.
529 in the retirement case

How the four accounts are taxed (2026)

  • Trump Account. Contributions can start on July 4, 2026, up to $5,000 a year including up to $2,500 from an employer; the $1,000 federal deposit is on top. Nothing can come out before January 1 of the year the child turns 18. After that the account follows traditional IRA rules: your own contributions come back tax-free in proportion, while the employer money, the $1,000 and all growth are taxed as ordinary income. Before 59½ a 10% additional tax applies unless an exception such as qualified higher education expenses fits (IRS Notice 2025-68).
  • 529 plan. Growth is tax-free when it pays qualified education expenses. A withdrawal for anything else makes the earnings taxable to the person who receives it, plus a 10% additional tax; many states also take back the deduction they gave (IRS Publication 970, and each state's rule in the table below). A 529 open at least 15 years can also move to the beneficiary's Roth IRA without federal tax: up to $35,000 over the beneficiary's lifetime, no more each year than that year's IRA limit and the beneficiary's earned income, and not contributions made in the last five years or their earnings (IRC 529(c)(3)(E)). States do not all agree; each state's rule is in the table below.
  • Custodial Roth IRA. The child can contribute no more than their earned income for the year, up to $7,500 for 2026. Contributions come out first and are never taxed again; earnings taken before 59½ are taxed as ordinary income, with the 10% additional tax unless an exception such as education expenses fits (IRS Publication 590-B).
  • UTMA or UGMA account. A taxable account in the child's name. Dividends are taxed every year and gains when shares are sold, at capital gains rates.
  • Kiddie tax. A child's unearned income over $2,700 is taxed at the parents' rate for a child under 18, and at 18 or as a full-time student up to 23 unless the child's earned income is more than half of their support (Form 8615 instructions). Trump Account and Roth IRA withdrawals count as unearned income.

What the calculator assumes

  • Contributions go in at the start of each year from 2026 through the year before the child turns 18. The return, dividend yield and inflation are the same every year. Tax brackets and limits stay at their 2026 values in today's dollars (they are indexed to inflation); what you paid in is not indexed, so growth that only keeps up with inflation is still taxed.
  • For college: the account is spent over four years starting the year the child turns 18 (a quarter of the balance, then a third, then half, then the rest), all on qualified expenses. The child is a full-time student. For anything: everything is taken out in the year the child turns 18. A 529 plan is cashed out by the parent who owns it, so the earnings are taxed at the parents' rates.
  • For retirement: nothing more is added after 17 and nothing is taken out until the child turns 60; then a tenth of the balance comes out, then a ninth of what is left, and so on until 69. From 18 the child files as a single adult with the income you enter, in the same state, and taxable accounts pay tax on their dividends every year. Trump Account withdrawals are taxed as ordinary income under traditional IRA rules (no additional tax after 59½); Roth IRA withdrawals are qualified and tax-free. The 65-or-older standard deduction add-on is applied; the temporary $6,000 senior deduction is not, because it ends after 2028.
  • The 529 in the retirement case: if you leave the option on, the 529 stays invested until it has been open 15 years, then moves to the child's Roth IRA each year the lesser of that year's IRA limit, the child's income and what is eligible (contributions made in the last five years, and their earnings, are not), until $35,000 has moved. The rest is then cashed out on the parents' return and invested in a taxable account for the child. With the option off, or with no adult income, the whole 529 is cashed out at 18 and invested the same way. Which contributions are old enough is approximated by counting years of contributions, not by tracking each contribution's earnings. Alabama, California, Colorado, DC, Indiana, New Jersey, Vermont and Virginia tax the move or take back part of the 529 deduction or credit: income it adds is taxed on the child's return, and a take-back on yours. Thirteen states say it is tax-free; the others have not said, and the calculator assumes no state tax there.
  • Taxes on a UTMA account's dividends are paid from the account while saving and from the withdrawals after 18.
  • State tax on the child's income is figured on the child's own state return, with the state's rules for someone who can be claimed as a dependent: many states limit the standard deduction (often to the larger of $1,350 or earned income plus $450) or take away the personal exemption. California and Hawaii also tax part of a child's investment income at the parents' rate when that is higher (California FTB 3800 over $2,700; Hawaii Form N-615 over $1,000 for a child under 14). The rule used for each state is in the table below. If the child pays over half of their own support from 18, the child files as an independent adult from then on.
  • A Trump Account is an individual retirement account under federal law (IRC 530A). In states that follow the federal treatment, its withdrawals are treated like traditional IRA withdrawals, so a state that exempts IRA income at any age (for example Illinois) exempts them here too. No state has published guidance saying so; this is how their IRA rules read.
  • In states that do not follow the federal treatment (Massachusetts, Pennsylvania, South Carolina and Wisconsin) the Trump Account is taxed by the state like a taxable account: dividends every year (paid from outside the account, since nothing can come out before 18), gains when sold, and employer contributions as wages. Only Pennsylvania has described its treatment; for the others this is our assumption. Alabama taxes employer contributions as wages. Arizona subtracts withdrawals. Arkansas, Mississippi and New Jersey have not said; the federal treatment is assumed.
  • The 529 deduction or credit is figured each year on your state return and the savings are invested at the same return (shown as "tax savings outside the account"). Married couples get the state's joint limit; where the limit is per account or per account owner (DC, Iowa, New York, Virginia) each parent is assumed to own an account for the child. Carryforwards of contributions over the limit are not used.
  • Not included: the 3.8% net investment income tax, the alternative minimum tax, local income taxes, the exemptions or credits you get for the child as your dependent (the same for all four accounts), account fees, financial aid effects (a UTMA account counts as the student's asset; for how a Trump account could count, see Trump accounts and the FAFSA), and the Washington capital gains excise tax.

The rules used for every state

Each row is what the calculation uses. The 529 figures come from each state's own instructions, statutes or plan administrator (sources below); the Trump Account column comes from our state table. State income tax itself comes from the same engine as our retirement tax tool, so the two pages cannot drift apart; where a state had not published 2026 figures, its 2025 figures are used there and marked.

Test cases

Every case below was computed independently by a reference implementation and by this page's code; the two must agree to the cent on every figure before the page is published. You can rerun the comparison in your browser.

List of the test cases (click one to load it into the form)

    Sources

      Corrections

      If a rule or a figure is wrong, tell us. We fix it, update the checked date, and note the change here.

      • , where the account starts. We had written that every Trump Account starts at Robinhood. Since Treasury opened accounts automatically on October 1, 2026, an account is held by BNY until a parent or guardian claims it, and at Robinhood after that; the paragraph above now says so and links our claim page. We also checked the contribution limits the calculator uses ($5,000 a year, up to $2,500 from an employer, the $1,000 federal deposit outside the limit) against the official Trump Accounts help center; they are unchanged, and so are the results.
      • , state tax on a child's income. The calculator had added a dependent child's income to the parents' state return, which overstates the tax in most states. It now figures the child's own state return with each state's rules for someone who can be claimed as a dependent, plus the California and Hawaii rules that tax part of a child's investment income at the parents' rate. The state tax in the UTMA, Trump Account and Roth IRA columns fell in most states; in the example (New York) the UTMA account for college rose from $105,480 to $107,571 and the Trump Account from $100,853 to $102,053. The same day we added the retirement case, each state's treatment of moving a 529 to a Roth IRA, and newly published 2026 state figures (among them Montana's and Utah's rates), which this calculator shares with our retirement tax tools.

      This tool shows what published tax rules do to the numbers you enter. It is not tax, legal or financial advice, and it does not know your situation. For a decision that matters, take the numbers to a professional who is licensed to advise you.