Update 10/20/2026: Pursuant to newly issued proposed regulations, beginning October 1, 2026, the Treasury Secretary will automatically establish initial Trump Accounts for individuals with Social Security Numbers who are under the age of 18 and who have not previously made elections. Guardians, legal custodians, or eligible individuals may claim these accounts through an electronic application.
On December 2, 2025, the Department of Treasury and the IRS released Notice 2025-68 (Notice), which provides initial guidance on the new Trump Accounts that were announced as part of the One Big Beautiful Bill (OBBB). As a reminder, the Trump Accounts are a type of tax-advantaged child savings account that can be used for qualified expenses after the child turns 18. While the Notice provides general guidance on how Trump accounts work, additional guidance is still expected. Contributions can be made to the accounts beginning on July 4, 2026.
Initial Establishment of a Trump Account
A Trump account can be established for children under the age of 18 who have a social security number; however, the account must be established before January 1st of the calendar year in which a child turns 18 (this is referred to as the “growth period” in the Notice).
In addition, children who are born between 2025 and 2028, are U.S. citizens, and have a social security number are eligible to receive $1,000 of seed money for the account through the government’s “pilot program contribution.”
“Authorized individuals” can establish a Trump Account for an eligible child by:
- Making the election on IRS Form 4547 (once the form is released), including at the same time the authorized individual files their 2025 income tax return (or any subsequent tax return); or
- Through an online tool or application on trumpaccounts.gov (this tool is expected to be available in the middle of 2026).
Legal guardians, parents, adult siblings, and grandparents of the eligible child are “authorized individuals” who can establish a Trump account. However, only individuals that anticipate the child to be their qualifying child under Internal Revenue Code (Code) § 1529(c) can also request the $1,000 pilot program contribution at the same time as establishing the account.
All initial Trump accounts must be established with the “initial trustee” (i.e., bank), selected by the Treasury. After an authorized individual elects to establish a Trump account, the Treasury Department or its agent will send that individual instructions on how to complete the opening of the account. These instructions will be sent beginning in May 2026.
Rollover Trump Accounts
Once the initial Trump Account is established, individuals can move their account to another provider (i.e., establish a “rollover Trump account”) if it is done during the growth period. Any current IRA trustee or custodian will be eligible to offer the rollover Trump accounts, as long they comply with various reporting and administration requirements.
Individuals can only have one funded Trump account at any time, meaning that, if a rollover Trump account is established, the entire balance of a prior Trump account must be rolled over into the new account.
After the child turns 18, a Trump account may be rolled over into an individual retirement arrangement or other eligible retirement plan.
Contributions to a Trump Account
Contributions to Trump accounts can be made beginning on July 4, 2026.
During the growth period, there are five types of contributions that can be made to a Trump account:
- A pilot program contribution from the Treasury of $1,000 for an eligible child;
- Qualified general contributions (funded by states, the United States, the District of Columbia, Indian tribal governments, or § 501(c)(3) tax-exempt organizations);
- Employer contributions that are not included in gross income of the employee under Code § 128;
- Qualified rollover contributions from a prior Trump account; and
- Contributions from other sources (e.g., account beneficiary, parents, or any other person).
Pilot program contributions, qualified general contributions, and qualified rollover contributions are not subject to an annual contribution limit. However, all other contributions (contributions from employers and other sources) are subject to an aggregate annual limit of $5,000 (subject to cost-of-living adjustments after 2027).
Contributions to a Trump account are counted for the year in which the contribution is made (e.g., a contribution made on 1/31/2027 is for 2027 and cannot be applied to 2026).
Employer Contributions
Employers can make contributions to an employee’s Trump account or an employee’s dependent’s account under Code § 128. Contributions are limited to $2,500, subject cost-of-living adjustments after 2027, and are not included in the employee’s income. It is important to note that the $2,500 limit is per employee and not per dependent of the employee. For example, if an employee has two children that have Trump accounts, an employer with a Trump account contribution program may only contribute $2,500 in aggregate for 2026 to those Trump accounts.
To provide employer contributions, an employer must establish a § 128(c) “Trump account contribution program,” which is defined as a separate written plan of an employer for the exclusive benefits of its employees to provide contributions to the Trump accounts of such employees or dependents of such employers. Employers that establish a Trump account contribution program will also be subject to similar requirements that apply to Section 129 Dependent Care Assistance Programs (DCAPs) often also referred to as Dependent Care Flexible Spending Accounts, regarding discrimination, eligibility, notification, statements, and benefits.
The Notice clarifies that contributions can be made via salary reductions as a part of an employer’s Section 125 cafeteria plan if the contribution is made to the Trump account of the employee’s dependent, but not if the contribution is made to the Trump account of the employee, as this would be an impermissible deferral of compensation. The Treasury and IRS intend to address rules related to the coordination of Trump account contribution programs and Section 125 cafeteria plans in forthcoming proposed regulations.
In addition, the Departments of Labor and Treasury anticipate issuing guidance on how employers can structure contributions to Trump accounts to ensure they are not subject to the ERISA coverage framework.
Distributions
During the growth period, Trump accounts cannot allow distributions, except for qualified rollover contributions to another Trump account, distribution of excess contributions, or distribution upon the death of the account beneficiary. The account cannot make hardship distributions or be closed in order to distribute funds.
Starting January 1 of the calendar year in which the account beneficiary turns 18, distributions are permissible.
After the growth period, Trump accounts are generally subject to § 408 rules that apply to traditional IRAs (e.g., contributions, distributions, required minimum distributions, rollovers, Roth conversions, ordinary income taxation, and reporting).
What’s Next
Though this initial guidance provides some insight into the newly created Trump accounts, additional and definitive guidance is still needed, especially when it comes to the coordination of Trump accounts and § 125 cafeteria plans, as this will provide guidance for employers on how (and whether they want to) establish a Trump account contribution program or allow § 125 salary reductions for Trump account contributions.
Additional Resources
Connect with a Sequoia consultant to learn how Sequoia’s compliance services are integrated in our benefits services and tailored solutions. And if you’re already a Sequoia client, stay on top of your employer obligations with your Compliance Checklist that highlights important compliance dates, action items, and resources.
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