CHILDREN could be getting a $1,000 payment under a new plan to help families set their kids up for success.
The MAGA payments, short for Money Account for Growth and Advancement, are part of a massive Republican-backed tax and spending bill that is making its way through the legislature.
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The bill passed the House Ways and Means Committee in Washington, DC, this week and now heads to the full House for consideration.
If the MAGA savings accounts proposal is approved, parents with children born in the US between January 2025 and December 2028 could get a one-time $1,000 deposit from the federal government.
The money would go into an investment account managed by families with funds locked in until the child turns 18.
The end goal is for the babies to have tens of thousands of dollars in their accounts by the time they become adults.
In addition to the $1,000 funded by the government, parents will be able to contribute up to $5,000 each year.
The contributions are designed to be invested in a low-cost US stock market index fund, reported Market Watch.
The accounts are tax-deferred but withdrawals would be taxed as capital gains if used for education, buying a home, or starting a business after age 18.
Any other use before age 30 would face income tax and a 10% penalty.
Funds would be released to the child fully at age 31.
To qualify, the child must be a US citizen at birth.
And, the taxpayer claiming the child, and their spouse if married, must have a valid Social Security Number.
‘BIG, BEAUTIFUL BILL’
Senator Ted Cruz said the idea was first pitched by Altimeter Capital CEO Brad Gerstner and modeled off Cruz’s earlier Invest America Act proposal.
“Every child in America will have private investment accounts that will compound over their lives,” Cruz said.
Republicans say that the program would promote long-term wealth-building and financial literacy.
“It’s a tiny amount of money to get every child in America in the game,” Gerstner told CNBC.
The plan is part of Trump’s sweeping “big beautiful bill” aimed at expanding the 2017 Trump-era tax cuts.
MAGA payments for children
- What: $1,000 government-funded investment account for kids.
- Who qualifies: US citizen children born Jan 1, 2025 – Dec 31, 2028.
- Payout: One-time $1,000 deposit from the government.
- Extras: Families can add up to $5,000/year.
- Access: Funds unlock at age 18, fully paid out by 31.
- Use: For school, home, or business – taxed as capital gains.
- Penalty: Early withdrawals hit with income tax + 10% fee.
- Eligibility: Child must have SSN; so must parent (and spouse if married).
Trump called the proposal “GREAT” on Truth Social and said he would help finalize it after returning from the Middle East.
PUSHBACK
Not everyone is impressed with the proposal with some arguing it could lead to a tax headache or fail to make a difference.
“It’s $1,000 lest all the cost of figuring out how the thing works and taking on the risk of making a mistake and the IRS coming after you, and there’s a 10% penalty,” said Will McBride, chief economist at the Tax Foundation.
Others believe the $1,000 won’t do much to ease families’ financial burdens.
“That’s not the same as a tax code focused on improving the daily lives of American parents,” Patrick Brown of the Ethics and Public Policy Center said.
Darrick Hamilton, one of the architects behind Democrats’ “baby bond” proposal, said MAGA accounts could “inflate asset prices” and worsen inequality.
The bill faces more review in other committees with Speaker Mike Johnson pushing for a full House vote by Memorial Day.