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In JBAY’s July 21, 2026 Weekly Policy Newsletter, the article titled, “Federal Administration Releases Guidance on New $1,000 Investment Accounts for Foster Children” contained an error. The article referenced only SB 180, but should have referenced both SB 180 and AB 152. The corrected article appears below.
Federal Administration Releases Guidance on New $1,000 Investment Accounts for Foster Children
The U.S. Internal Revenue Service (IRS), in coordination with the Administration for Children and Families (ACF), has released proposed regulations and implementation guidance for the new Fostering the Future Accounts created under H.R. 1. Available to foster children, these accounts are specialized versions of the federally-backed, tax-advantaged 530A investment accounts—often referred to federally as "Trump Accounts." Foster children are eligible to receive an initial $1,000 federal deposit.
Beginning at age 18, account holders may use the funds for qualified expenses such as higher education, homeownership, starting a small business, or retirement. The accounts are similar to California programs that help young people build assets, including California Achieving a Better Life Experience (CalABLE) Accounts, CalKIDS Accounts, and Hope, Opportunity, Perseverance and Empowerment (HOPE) Accounts.
The ACF's guidance also clarifies that Fostering the Future Accounts may be rolled over into an ABLE account. In addition, states may claim eligible Title IV-E administrative costs for establishing and managing the accounts and may contribute eligible Temporary Assistance for Needy Families (TANF) funds to foster children's accounts.
Last week, the IRS received public comments from six state and national organizations. Recommendations focused on automatic enrollment, streamlining deposit and withdrawal procedures, and explicitly allowing child welfare agencies to open accounts and authorize the initial $1,000 deposit for eligible foster children.
These recommendations align with California's recently enacted budget trailer bills SB 180 and AB 152, which exclude funds held in 530A accounts from eligibility determinations for means-tested public benefits until they are withdrawn or transferred. The policy mirrors protections for California's HOPE for Children Trust Account Program, helping ensure young people can build savings without jeopardizing access to critical public benefits.
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