Republicans are proposing the creation of a new tax-preferred savings account for children dubbed the “money account for growth and advancement,” or MAGA account, in their “one big beautiful” tax bill. The proposal calls for giving $1,000 to children born between 2025 and 2028 to kickstart savings, and supplies other incentives for parents to save for their kids’ future.
As currently written in the draft legislation, the MAGA account would allow parents to contribute up to $5,000 per year that would be invested in U.S. equities. Money contributed to the account could be put toward qualifying expenses like school or job training expenses, to buy a home, or to start a small business. Republicans are still working out what they mean by tax advantaged. One plan says it would be “exempt for taxation,” while another bill summary says the withdrawals would be taxed at the long-term capital gains rate, akin to a brokerage account. The government could also contribute, and those would not be subject to a cap.
