Governor launches new era of CalKIDS accounts working with federal to maximize free funds for all children in California

Higher education is expensive. California became the first state in the United States in 2022 to provide free education funds for children since birth. Governor Gavin Newsom announced in San Francisco that California has launched the California Golden Start Challenge, the second phase of the CalKIDS program, partnering with the federal government and more businesses to maximize college funds for all children.

Newsom first launched the CalKIDS program in 2022 and recently announced California Golden Start Challenge program, a joint effort between the State of California and Invest America, to help boost children's savings for college and career. He made the announcement in a press conference at the newly-opened APA Family Support Services Excelsior Center in San Francisco.

Invest America Accounts, which are also commonly called "Trump Accounts," are a federal program that provides government-seeded, tax-advantaged investment accounts for American children. This program was officially signed into law by President Trump in 2025 as part of the federal One Big Beautiful Bill Act. It officially opened for account creation and contributions on July 4, 2026.

CalKIDS' full name is the California Kids Investment and Development Savings Program. The program is administered by the ScholarShare Investment Board, an agency of the State of California. CalKIDS provides participating children with scholarship accounts to help pay for future qualified higher education expenses when they reach college.

The accounts provided by CalKIDS are also named "baby bonus accounts." When Newsom launched the accounts in 2022, all children born in California on or after July 1, 2022 are eligible for a CalKIDS Scholarship account once they sign up to claim it.

The CalKIDS serves as an investment account for participating children. Families and friends can add more funds to these accounts for the children's future college education and build on those savings over time as a financial foundation.

If the funds are withdrawn and not used for qualified higher education expenses, a 10% federal penalty tax will be imposed on earnings, federal and state income taxes may also apply. Non-qualified withdrawals may also be subject to an additional 2.5% California tax on the earnings.

Newsom announced at the APA Family Services Excelsior Center that California has reached a major milestone: more than 6 million CalKIDS accounts have been established and funded with more than $2.3 billion, including 1 million accounts claimed by families.

The program has already helped 151,000 California students pursue their education, with $82.2 million distributed. But millions of dollars in available savings remain unclaimed. Families can visit CalKIDS.org to determine eligibility and claim their account. 

Newsom encouraged all parents to claim the CalKIDS accounts for their children and said, "Every kid deserves a shot at a bright future — no matter how much money their family makes. That’s why we created CalKIDS: to put up to $1,500 in the hands of kids to help pay for college, career training or whatever comes next."

"One million kids have already claimed their accounts, but millions more still have money waiting for them. We want every family to know: that money is yours — claim it, grow it, and put it to work for your child’s future," Newsom said.

While the "Trump Accounts" program has begun to operate since July 4 in 2026, Newsom announced the launch of the California Golden Start Challenge to work with the federal government to enhance education savings for all children in California. "We're giving our kids an even stronger opportunity to build the future they deserve," Newsom said.

Under the California Golden Start Challenge, contributions will be split between eligible CalKIDS accounts and federal 530A accounts, creating new opportunities for families to build long-term savings, according to Newsom.

Newsom invited private-sector and philanthropic leaders to join and help children build savings for the future by contributing to both CalKIDS accounts and federal 530A accounts.

Micron Technology has pledged $250 million to help build children’s savings, including $250 seed deposits for children with accounts in Sacramento and Santa Clara counties.

In San Francisco, an anonymous donor has given $3.5 million to create a $500 deposit for every child born in the city in 2026.

In California, the initial funds offered by the CalKIDS program to be deposited into children's accounts are: $25 for children born between July 2022 and June 2023, and $100 for children born on or after July 1, 2023.

An additional $25 bonus will be added when each parent claims the CalKIDS Scholarship Account. $50 bonus is for each participant to link the CalKIDS account with a ScholarShare 529 account.

Under the federal "Trump Accounts" program, the U.S. Treasury established the federal 530A accounts program giving every American child under age 18 with a Social Security number access to a tax-advantaged investment account.

Family, friends and employers can also contribute to a child’s account under the federal program, while governments and philanthropists can make additional qualifying contributions to groups of children.

Every eligible child born between January 1, 2025, and December 31, 2028 in the United States can receive a $1,000 contribution deposited directly into their federal 530A accounts from the U.S. Treasury.

Fanny Lam, Executive Director of APA Family Support Services, reminded all parents to claim the CalKIDS and 530A accounts for their children.

"It means a lot to us that our leaders, our governor, are here to introduce and talk more about this college savings accounts," Lam spoke at the event welcoming Newsom and supporters of the CalKIDS program to visit APA Family Support Services’ new center in the Excelsior neighborhood.

Lam said both the state and federal "baby bonus accounts" meant a lot for many parents who have been working hard to support their children and families. "They can't even think about paying for a savings account when they have high increases in grocery bills, utility bills, and every bill that comes every single month," Lam said.

Some immigrants might worry that the CalKIDS accounts could impact them in different ways. Lam clarified that the accounts would be specifically for their kids to use as college funds. It has nothing to do with any circumstances of the parents themselves.

More details of the CalKIDS program can be found online at CalKIDS.org.