The federal tax and spending bill signed into law by Trump in July 2025 included a provision that will allow for parents in the U.S. to create “Trump accounts,” which would be an IRA account, for their children. Under the provision, the federal government will provide $1,000 into the account for babies born between Jan. 1, 2025 through the end of 2028 and who are U.S. citizens with a valid Social Security number.

Rep. Elijah Behnke (R-Town of Chase) said that the accounts are “designed to help families build long-term financial security” and allow children to “grow alongside the American economy.” The money in the accounts will be invested in low-cost index funds tied to the U.S stock market, and the accounts will be managed by a private company.

Behnke said “starting early makes a powerful difference” for children who will have the funds set aside, which could be used for down payment on a house, higher education or starting a business in the future.

“We’re concerned that they’ll never be able to buy a home. Maybe this gives them a chance down the road,” Behnke said.

The bill will provide a state match of $1,000 to the accounts for babies born in Wisconsin.

Parents must opt in and open the accounts for the funds to be set aside and then invested. Children, parents, family members, friends and employers will also be able to contribute up to $5,000 per year per child to the account with funds unable to be accessed until recipients turn 18.

The investment account plan is not the only Trump administration policy that Wisconsin Republicans have sought to replicate at the state level this session. Others include exempting tips and overtime pay from the state income tax.

Behnke said lawmakers would tap the state’s budget surplus for the initiative. According to the bill draft, the state would set aside $60 million in annual funding for the 2025-27 budget cycle for this purpose.

“We have a surplus, thankfully, and it’s over a $1 billion, and obviously we’re discussing some property tax relief, but 60,000 kids [are] estimated to be born in Wisconsin each year, so that would be about $60 million put into account for the next couple years,” Behnke said.

Recent projections from the Wisconsin Legislative Fiscal Bureau estimate that the state’s budget surplus at the end of June 2027 will be $2.37 billion, which is about $1.5 billion above the projected balance when the current state budget was enacted last year. Evers has called for lawmakers to use over $1 billion from the surplus to address rising property taxes throughout the state. Republican lawmakers have signaled some willingness to work on the issue, including Behnke who said that “we’d all be taxed out of our homes if we don’t do something to fix it.”

Behnke said he did not know where the state Senate and Gov. Tony Evers stand on his proposal. Their support will be necessary for the policy to become a reality.

“I’ve asked one elected Democrat and he said he would get back to me,” Behnke said. “[Evers has] been very focused on kids’ education, and since we can use this fund for higher education, I mean, I think some of it would be attractive for him to sign.”

Behnke is also the lead Assembly author on a bipartisan bill that would give children born or adopted in Wisconsin $25 in a state-managed 529 account to help kickstart their educational savings. The bill has bipartisan support and recently received a public hearing in the state Senate last week.

Democratic lawmaker urges caution

One of the Democratic coauthors on that bill, Rep. Alex Joers (D-Waunakee), told the Wisconsin Examiner he recommends caution in pursuing a state match to the “Trump accounts.” He said he thought the effort was a “flashy” one meant to “grab headlines.”

“It’s a little bit risky to be putting our state funds towards a federal program that isn’t technically set up yet,” Joers said. “We’re basically having to make a dedicated state funding decision based on a federal program that hasn’t begun yet, so that’s to me a little bit fiscally concerning.”

The Trump administration has said that the accounts are supposed to become available on July 4, 2026.

Joers noted that the state has to “balance its ledger,” unlike the federal government, and Wisconsin policymakers are discussing using the budget surplus for property tax relief, boosting aid to schools, funding for child care and other priorities.

Joers said the “WisKids” bill is designed to be sustainable year after year, meanwhile the “Trump accounts” bill would expire after 2028.

Wisconsin has had a 529 account program for the last 25 years that is primarily managed through Edvest. According to the bill coauthors, there are over 400,000 accounts and assets totaling $8.6 billion under management.

Parents would need to claim the $25 before their child turns 10, under the legislation. The funds in the account could be used for college, technical education, credential programs or apprenticeships. Withdrawals from a 529 account are tax-free for qualified expenses including tuition, room and board.

“The reality is that most Wisconsin families still aren’t saving early for their child’s education, and many aren’t saving at all,” Behnke said in written testimony about the proposal. “WisKids is designed to change that… We know this approach works. Oklahoma saw a dramatic increase in family-owned 529 accounts after launching a similar program. A small investment at birth encouraged parents to keep saving and gave them a different way of thinking about their child’s future.”

Joers said that calculations show the $25 would potentially grow to be about $100, but the purpose of the bill is to act as a “tap on the shoulder” for parents and guardians to get them interested in starting an Edvest account.

The “WisKids” bill would not need additional state general purpose revenue, but would instead tap into existing funds held by the state Department of Financial Institutions (DFI).

According to a fiscal estimate by the agency, the legislation would use an existing college savings program trust fund, which is funded by administrative fees established by the college savings program board and imposed on college savings program accounts. The state stopped collecting fees on 529 accounts in 2005, but the funds have remained growing in the account and are ready to be used, Joers said.

Under the legislation, the minimum balance of the trust fund that must be maintained to meet the reasonably anticipated needs of the college savings program would have to be calculated and if the trust fund balance falls below that amount, the DFI would stop making deposits until the trust fund balance is sufficient.

“It’s in line with what their program was established for, but they can’t just do that. They need legislation to be able to do that,” Joers said.

Joers noted that Edvest accounts can be rolled over into a retirement account should the funds not be used for educational purposes.

Promoting the Trump accounts proposal, Behnke said that parents could supplement the account in a way that would be “life-changing.”

“Just with mom and dad, skipping one quick meal, or one small luxury a month — lets their kids become a millionaire,” Behnke said.

“That’s a bipartisan consensus that we want our kids born in Wisconsin to be best set up for the future,” Joers said. But, he cautioned, it’s important to do it in a way that’s “sustainable, and not just going along with the headlines of the day.”

Originally published by Wisconsin Examiner, a nonprofit news organization.

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