The Tax Rules Around The Dells’ $6.25 Billion Contribution To Trump Accounts

Earlier this month, Michael and Susan Dell made one of the largest philanthropic commitments in modern U.S. history, pledging $6.25 billion to support “Trump Accounts” –those new accounts for children created by the One Big Beautiful Bill Act (OBBBA). As part of that law, Congress committed to seeding accounts for babies born between 2025 and 2028 with an initial $1,000 deposit. The Dells’ billions will seed with $250 each the accounts of roughly 25 million children under age 10, who were born before 2025, and thus aren’t eligible for the $1,000. If not enough families of children under 10 open the accounts, any money that remains of the $6.25 billion could go to older children, according to a statement the couple posted online. To be eligible, children must live in zip codes where the median household income is below $150,000.

The gift raised some questions, especially given the size, scope, and intended purpose—it really hasn’t been done before. Here’s a quick look at what you need to know about the gift, how charitable donations work, and whether taxpayers can receive a benefit from writing a check to Uncle Sam.

Who are Michael and Susan Dell?

Michael Dell is the founder and CEO of Dell Technologies, one of the world’s major computer and technology companies—he started the business in his college dorm room and built it into a global corporation. He has an estimated net worth of $148.9 billion, making him currently the ninth richest person in the world, according to Forbes’ real time tracking of billionaires. His wife, Susan, is a philanthropist and a driving force behind the couple’s charitable work. Together, they’ve become prominent figures in both tech and philanthropy, especially in initiatives focused on children and economic opportunity.

Where will the money ($6.25 billion) come from?

The money won’t come directly from the Dells, but from the Dell Foundation which the Dells fund.

How did they decide on $250 per child?

According to Michael Dell, the dollar amount aligns with the 250th birthday of America on July 4, 2026 (that’s also the first day that the accounts can be funded).

What is the Dell Foundation?

The Michael & Susan Dell Foundation is the couple’s private foundation, launched in 1999. It focuses on helping children and families, especially in urban, low-income communities. Over the years, it has funded work in public education, public health, community development, and poverty reduction in the U.S., as well as other countries like India and South Africa.

What is a private foundation?

A private foundation is a charitable organization funded and run by a small group—often a single family, individual, or corporation (other examples include the Gates Foundation, the Ford Foundation, and the Walton Family Foundation). Private foundations are tax-exempt organizations with very specific rules: They must give away a minimum amount each year for charitable purposes, can’t engage in political campaign activity, and must publicly report their finances. Private foundations have a lot of freedom in what causes they support (so long as they’re charitable), which is why they’re often the vehicles wealthy families use to structure their long-term philanthropy.

How is a private foundation different from a charitable organization (or public charity)?

There are a few ways that private foundations differ from charitable organizations, including funding and management. As noted earlier, a private foundation is usually funded and run by a single person, family, or company, while a public charity tends to get its support from the general public and has a broader governing structure. Another key difference? Foundations are usually created to give money away, while public charities tend to run programs directly. The IRS treats them differently, too, since foundations face stricter rules and reporting requirements.

What about tax deductions for gifts to a private foundation, versus a public charity?

If you itemize your deductions, you can deduct cash gifts to a public charity up to 60% of your adjusted gross income (AGI) in 2025. Gifts of stock or other appreciated property are usually limited to 30% of AGI. If you exceed the limits, you can typically carry the excess deductions forward for five years.By contrast, cash gifts to most private foundations can be deducted only up to 30% of AGI, and gifts of appreciated property are usually limited to 20% of AGI. The same five-year carryforward applies.

The most philanthropic billionaires, like Berkshire Hathaway CEO Warren Buffett (currently worth $148.9 billion), who has already given away nearly $65 billion and says he plans to donate 99% of his wealth, will never get to claim an income tax deduction for all their donations, since they dwarf their reported income. But what they leave to charity after their death won’t be subject to federal estate tax.

Can an individual taxpayer receive a tax deduction for a donation to other individuals?

No. If you give money directly to someone—no matter how deserving they are—it’s considered a gift, not a charitable donation, so you can’t deduct it on your taxes.

Can a private foundation receive a tax deduction for a donation to individuals?

This is a tricky question. A private foundation can’t receive a tax deduction for donations—remember, it’s already tax-exempt—but it still has to follow strict IRS rules for distributions. That means a private foundation can give money to individuals, but only under very specific, IRS-approved circumstances, such as scholarships or disaster relief programs with written guidelines. Most often, a private foundation will donate money to public charities—like Invest America. In other words, the Dells can get a tax deduction for contributions to their private foundation, which can then support individuals in certain IRS-approved circumstances or through donations to public charities.

What is Invest America?

Invest America is the original name of the Trump accounts (it was changed to Trump accounts in the final version of OBBBA). It’s also a nonprofit that was created by Brad Gerstner (founder and CEO of Altimeter) to promote and administer the accounts. The organization hopes that other business leaders and individuals get involved and consider making a donation (There’s an Invest America Philanthropy Pledge on the website, which is described as “a simple, non-binding way for foundations and other philanthropic partners to affirm their intent to support the accounts of children in the communities they serve.” If you take the pledge, an Invest America team member will follow up to discuss partnership options.)

Let’s say that Invest America didn’t exist. Could the Dells, or anyone, donate directly to the federal government?

Yes. Anyone—individuals, companies, nonprofits, whoever—can donate money to the federal government. There’s even an official “Gifts to the United States” fund run by the Treasury for general contributions. Donations can’t be earmarked for political use or for the benefit of a particular person. They have to support a public purpose that the government is authorized to fund.

Would a donation to the federal government be tax-deductible?

Yes, a donation to the federal government is tax-deductible if it’s made for exclusively public or charitable purposes. The IRS treats the federal government as a qualified charity so long as the gift is intended to support public functions and not to benefit a particular person, not to influence an election, and not to secure something personal for the donor. A charitable donation would include a contribution to the “Gifts to the United States” fund for general public use, or to a specific federal agency, such as the National Park Service, for public programs.

When would a donation to the federal government not be tax-deductible?

A donation to the federal government wouldn’t be tax-deductible if it were meant to benefit a specific individual, if it were intended to influence political activity, or payments that are really fees, penalties, or taxes (those aren’t really “gifts,” are they?).

What else should I know about Trump accounts?

If you’re considering participating in Trump Accounts, watch for the final Treasury and IRS rules on account opening—we already have some initial guidance. Finally, it’s worth comparing Trump accounts to other savings options like 529 plans, so you can decide what works best for your family.

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