The Internal Revenue Service (IRS) released much anticipated guidance March 6, 2026 on Trump accounts, which are set to launch on July 4, 2026. Two proposed rules were issued—one on how to establish Trump accounts, and the other on how to elect for eligible children to receive the Trump account Contribution Pilot Program (Contribution Pilot Program), which is $1,000 from general Treasury funds.

30 Second Summary

• What’s new? The proposals answer questions for parents and financial institutions on establishing and administering Trump accounts.
• What’s next? The proposed rules don’t address employer contribution programs, employer “matching” the Treasury’s contribution, employee salary deductions, investments or ERISA matching considerations, but additional IRS guidance will be forthcoming.
• What do employers need to know? IRS and Treasury are encouraging parents to set up Trump accounts for their children. Parents must actively elect to open an account. Accounts must be set up before an employer can make contributions or deposit salary deductions.

Background

As a reminder, the One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, creating Trump accounts as a tax-preferred savings account for children, with the intent of encouraging investing from a young age.

Under the law, the federal government will make an initial contribution of $1,000 to Trump accounts for eligible newborns born between 2025 and 2028. Parents, grandparents, the child and other individuals including employers can contribute up to $5,000 annually.

Trump Account Proposed Rule

The proposed rule provides guidance on who may elect to open a Trump account on behalf of a child if they are not eligible to participate in the Contribution Pilot Program, how and when elections can be made, and guidelines on investments and contributions.

It implements Internal Revenue Code (IRC) Section 530A, creating a special category of individual retirement account (IRA) established for the sole benefit of an eligible individual or their beneficiaries.

According to the rule, an eligible individual is any individual:

• Who has not turned 18 years old before the end of the calendar year in which an election to open an initial Trump account was made
• Who has a Social Security Number before an election to open a Trump account is made
• For whom the election is made.

Who may elect to open a Trump account on behalf of a child?

If a Contribution Pilot Program election for the $1,000 contribution is made at the same time a Trump account is opened, the authorized individual is the person making the pilot program election (e.g., parent or guardian).

If a Contribution Pilot Program election is not being made at the same time as the election to open an initial Trump account (i.e., because the eligible individual is not eligible for a pilot program contribution), the proposed guidance provides an ordering rule to determine who is the authorized individual for purposes of making the election to open an initial Trump account.

The rule explains that the Treasury and IRS believe there is a need for an ordering rule to create a clear process to determine who can make an election on behalf of a child because only one election to open a Trump account can be made for each eligible individual and to ensure more than one account isn’t opened per child.

The priority ordering to determine who is the authorized individual is as follows:

• Legal guardian
• Parent
• Adult sibling
• Grandparent.

How and when can individuals make an election?

The pilot program election is made by a parent or guardian using Form 4547, Trump Account Election(s). The official Trump account webpage also walks users through data submission.

Authorized individuals can make the election on or before December 31 of the year the child turns 17 years old, also known as the growth period. According to the proposed rule, once the growth period ends, the account transitions to standard IRA treatment, subject to any remaining special rules inapplicable to other traditional IRAs.

Are there investment and contribution rules?

The proposed rule includes guidance on how Trump account assets can be invested. During the growth period, investments in a Trump account must:

• Track the returns of a broad index of equities in primarily U.S. companies for which regulated futures contracts are traded
• Avoid the use of leverage
• Avoid annual fees and expenses above 0.1%.

Trump accounts may receive contributions from nonprofits, governments, employers and individuals. Contributions are subject to an annual limit of $5,000, adjusted for inflation.

Employers may contribute to the Trump account of an employee or an employee’s dependent under IRC Section 128. Section 128 employer contributions are excluded from the employee’s income, up to an annual limit of $2,500, adjusted for inflation. Employer contributions count towards the $5,000 annual contribution limit.

Will automatic enrollment be used for Trump accounts?

No. Several commenters to Notice 2025-68, “Notice of intent to issue regulations with respect to Section 530A Trump accounts,” requested that IRS automatically enroll beneficiaries using the Secretary of Treasury’s (Secretary) authority to elect to open accounts.

IRS declined to follow this suggestion, stating its reasoning in the proposed rule.

• Individual Trump accounts are different from pooled accounts (i.e., defined contribution plans). “Pooled accounts are well-suited to automatic enrollment because a plan or program can add a new individual as a participant or beneficiary of an existing pooled vehicle without establishing a new, separately maintained account in that individual’s name. By contrast, automatically opening a Trump account would require establishing a new individual account and completing the associated administrative steps needed to open and maintain that account in compliance with the Code and other applicable law.”
• The Secretary would be unable to fulfill certain requirements to open and operate a Trump account without disclosure of taxpayer information, in violation of IRC Section 6103.

When would the proposed rule take effect?

The proposed rule has the same applicability dates as the Trump account proposed rule, with it applying to taxable years beginning on or after January 1, 2026. Final rules are expected to be published within 18 months of the proposed rule’s applicability date.

Is IRS requesting comments?

Yes. IRS is requesting comments specifically on:

• Whether definitions are needed for the terms “legal guardian,” “parent,” “sibling” and “grandparent”
• Whether other individuals with a relationship to the eligible individual should be included in the priority list of authorized individuals
• Who may be the authorized individual in situations involving foster children, orphans, emancipated minors and wards of the state.

Comments on this proposed rule are due May 8, 2026.

Treasury Contribution Pilot Program Proposed Rule

The second proposed rule relates to the opening and administration of the Contribution Pilot Program where the accounts of eligible children can receive $1,000 contributions from the federal government.

Under the proposal:

• A pilot program–electing individual must make a pilot program election with respect to an eligible child of such individual in order for the Secretary to make a $1,000 pilot program contribution into the Trump account for which such eligible child is the beneficiary.
• Several terms are defined, including eligible child and pilot program electing individual.
• It is identified how the deemed payment upon the processing of a pilot program election generates and overpayment of tax for the eligible child in the amount of $1,000, which is then refunded to the eligible child as a $1,000 pilot program contribution into such child’s Trump account.
• Rules for the timing of the pilot program election are provided.
• Rules for the manner of making the pilot program election are provided.

An eligible child is an individual:

• Who the pilot program-electing individual anticipates will be that individual’s qualifying child for the taxable year of the pilot program–electing individual in which the pilot program election is made
• Who is born in calendar year 2025, 2026, 2027 or 2028
• Who is a United States citizen
• To whom a Social Security number has been issued
• Who has not previously received a contribution from the Secretary for the Contribution Pilot Program.

A pilot program–electing individual is the individual who anticipates the eligible child will be their “qualifying child” under IRC Section 152(c) for the tax year. The pilot program–electing individual can make the election at any time during a calendar year instead of waiting until the end of the tax year.

What if no Trump account exists?

The $1,000 governmental contribution is a contribution that is only available for established Trump accounts. If no account exists, the contribution is not paid or refunded in any other form.

How and when can an election be made?

The Contribution Pilot Program proposal differs from the Trump account proposed rule in that the child must be born between 2025 and 2028, but an election to set up a Trump account can still be made at any time between the date the child becomes eligible and December 31 of the calendar year in which the child turns 17.

The pilot program election is made by a parent or guardian using Form 4547, Trump Account Election(s). The official Trump account webpage also walks users through data submission.

What is the process for getting the $1,000 payment into the child’s Trump account?

Thomson Reuters explains, “when a pilot program election is made, the eligible child will be treated as making a $1,000 payment against a federal income tax liability, resulting in a $1,000 overpayment. The overpayment will then be refunded as a pilot program contribution to the child’s Trump account. Because overpayment amounts can be offset by taxes owed, but the statute requires a full $1,000 payment to a child’s Trump account, the regs provide that the pilot program election is made for the child’s “special taxable year” rather than the calendar year.”

What effect does the $1,000 government payment have on taxation?

IRS treats the election as a deemed $1,000 tax payment for the child and will then deposit that amount directly into the eligible child’s Trump account. The contribution does not count towards the Trump account annual contribution limit and is administered directly by Treasury.

When would this proposed rule take effect?

The proposed rule applies to taxable years beginning on or after January 1, 2026. Final rules are expected to be published within 18 months of the proposed rule’s applicability date.

Is IRS requesting comments?

Yes. Comments on the entirety of this proposed rule are due April 8, 2026.

What can be expected in future guidance?

Both sets of final rules reserved space for additional rules to be addressed before Trump accounts officially launch. Nixon Peabody breaks down which topics additional rules are expected on.

• Contributions. This includes employer contributions to Trump accounts, how employers can allow employees to make pre-tax contributions for their children and contributions during the growth period.
• Distributions during and after the growth period
• Eligible investments
• Reporting requirements
• Nondiscrimination testing for employer contribution programs
• Exempting Trump accounts from ERISA
• Coordination of salary reduction contributions with Section 125 rules
• Coordination with traditional IRA rules

For additional information on Trump accounts, see our previous blogs, “IRS Issues Q&As on Employer Contributions to Trump Accounts” and “What Employers Need to Know About Trump Accounts.” Stay tuned to the International Foundation for future updates and guidance on Trump accounts.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.