Trump accounts are new investment accounts for children under 18. Forthcoming proposed regulations on employer contributions to Trump accounts will be consistent with the questions and answers in Internal Revenue Service (IRS) Notice 2025-68, released December 3, 2025.
Trump accounts were created by a law commonly known as the One Big Beautiful Bill Act which added section 530A to the Internal Revenue Code (IRC). A Trump account is a type of traditional individual retirement account (IRA) established by an authorized individual for the exclusive benefit of a child under age 18.
Where Contributions Come From
Families can open accounts in early 2026 and contribute starting July 4, 2026. Eligible children born from 2025 to 2028 may receive a $1,000 pilot deposit from the U.S. Treasury. All eligible children may receive deposits from employers and major philanthropic contributors.
Establishing a Trump Account
The preliminary way for families to open accounts is to file Form 4547 with their current-year e-filed tax return. Draft form 4547, Trump Account Elections(s) and instructions were released December 5, 2025. For the 2026 calendar year, the election may be made while the 2025 income tax return is filed. The form is expected to be available online in mid-2026. The child listed in Form 4547, Part II, will be the owner/beneficiary of the initial Trump account.
A dedicated website www.trumpaccounts.gov will be updated as IRS implementation continues.
Trump Account Employer Contribution Programs (IRC Section 128)
IRC Section 128 employer contributions paid to a Trump account of an employee or a dependent of an employee are not includible in the employee’s income. Requirements similar to requirements that apply to a section 129 dependent care assistance program (regarding discrimination, eligibility, notification, statements, and benefits) apply to a Trump account contribution program.
IRC section 128 contains subsections that provide the following about employee income exclusion, annual limit and program definition.
- Section 128(a) provides that an amount paid by an employer as a contribution to the Trump account of an employee or of any dependent of such employee pursuant to a Trump account contribution program is excludible from income of the employee.
- Section 128(b) provides that the amount excludible under subsection (a) with respect to any employee shall not exceed $2,500 (subject to cost-of-living adjustments after 2027).
- Section 128(c) provides that a “Trump account contribution program” means a separate written plan of an employer for the exclusive benefit of its employees to provide contributions to the Trump accounts of such employees or dependents of such employees.
Annual Contribution Limits
Section 128 employer contribution to a Trump account can be made to a minor employee’s Trump account or a Trump account of a dependent of the employee. During the growth period, which ends before January 1 of the calendar year in which the account beneficiary attains age 18, section 128 employer contributions are subject to a $2,500 limit (subject to cost-of-living adjustments after 2027). Section 128 employer contributions plus contributions from other sources (other than a pilot program contribution and qualified general contributions), such as parents, are subject to a $5,000 annual limit.
Employer Contribution Q&As
The Treasury Department and the IRS expect that the forthcoming proposed regulations will be consistent with three Q&As.
Question 1: How much can be excluded from gross income of an employee for a contribution by an employer pursuant to a Trump account contribution program?
Answer 1: For a calendar year, up to $2,500 (subject to cost-of-living adjustments after 2027) may be excluded from an employee’s gross income. This annual limit is per employee and not per child. If an employee has two or more children that have Trump accounts, an employer’s contribution limit is $2,500 in the aggregate for the calendar year to those accounts.
Question 2: What information must an employer provide a trustee of a Trump account when making a section 128 contribution?
Answer 2: An employer must affirmatively indicate to the trustee that the contribution is a section 128 employer contribution excludible from gross income of the employee. The trustee of the Trump account may rely on the information from the employer, unless the trustee has knowledge to the contrary.
Question 3: May a Trump account contribution program be offered via salary reduction under a section 125 cafeteria plan?
Answer 3: Yes, in most, but not all, circumstances.
Yes, if the contribution is made to the Trump account of the employee’s dependent.
No, if the contribution is made to the Trump account of the employee, because doing so would provide deferred compensation under section 125(d)(2)(A).
More to Come on Section 125 Plans
The Treasury Department and the IRS intend to propose rules related to the coordination of Trump account contribution programs and section 125 cafeteria plans.
Read more in the notice about Trump account investments, rollovers, distributions, trustee monitoring of contribution limits and reporting.
Tentative Timeline
- Dec 17, 2025: Live announcement
- Topics weren’t released, but based on the contents of the notice, this announcement could be about the election to open an initial Trump account and the election for the pilot program contribution
- Approximately January-February 2026: Possible proposed regulations
- February 20, 2026: Comments due on Notice 2025-68.
- Approximately March-June 2026: Comments due on proposed regulations and possible final regulations
- July 4, 2026: Trump account contributions accepted
Once tax season begins, it will be interesting to see how many employees open Trump accounts for their children, how many employers will establish Trump account contribution programs and set up salary reduction via section 125 plans, as well as how payroll systems integrate with Trump account trustees. The International Foundation will post updates on the Presidential Administration and Employee Benefits Toolkit.
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.
