New Tax-Exempt Savings Accounts (MAGA) for Children and $1,000 Credit.
This law establishes a new type of savings account (MAGA Account) specifically for children under age 8, with an annual contribution limit of $5,000. Funds must be invested in low-fee index funds tracking United States equities. Earnings withdrawn for qualified expenses (higher education, first-time home purchase, small business loans) are taxed as net capital gains. Furthermore, parents of eligible children born between 2025 and 2028 will receive a one-time $1,000 tax credit deposited directly into the child's MAGA account.
Key points
Creates MAGA savings accounts for children, requiring establishment before the child turns 8 years old.
Annual contributions are capped at $5,000 and must be invested in low-cost US equity index funds.
Investment earnings withdrawn for qualified purposes are taxed as net capital gains.
Introduces a one-time $1,000 tax credit for children born 2025-2028, paid directly into the child's account.
Status:
Introduced
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