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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 and for any other use at 18.

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 $105,480 and a Trump Account $100,853. Used at 18 for something other than education, the order changes: UTMA $98,002, 529 $90,034, Trump Account $88,860. 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.

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.

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).
  • 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.
  • 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 as if it were added to your own state return. California taxes a child's investment income at the parents' rate this way; most other states tax a dependent child on the child's own return, usually at lower rates, so for them the state tax shown for the Trump Account, Roth IRA and UTMA columns may be higher than what you would owe. If the child pays over half of their own support from 18, the child's own state return is used 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, state exemptions or credits for dependents, account fees, financial aid effects (a UTMA account counts as the student's asset), 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.

      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.