Trump Accounts Now Allow Employer Contributions Up to 2,500 Dollars Per Year

The U.S. Department of the Treasury issued guidance in August 2026 allowing employers to contribute up to $2,500 per year to Trump Accounts on behalf of employees' dependent children, opening a new avenue for tax-advantaged savings.

Trump Accounts are traditional individual retirement accounts established under Section 530A of the Internal Revenue Code. They are designed for U.S. citizens under the age of 18 with a valid Social Security number. A pilot program provides a one-time $1,000 seed contribution from the Treasury for children born between 2025 and 2028.

Effective July 4, 2026, employers may implement formal Trump Account Contribution Programs to make these contributions. The $2,500 annual employer limit counts toward the aggregate $5,000 annual contribution limit per child.

Employer contributions are deductible for the business and excluded from the employee's gross income. However, they remain subject to FICA and FUTA taxes. To qualify for the tax exclusion, employers must maintain a written program that includes employee notices, annual statements, and nondiscrimination rules similar to dependent care assistance programs.

Proposed IRS regulations released in August 2026 exclude business owners, including partners, sole proprietors, and more-than-2% S corporation shareholders, from participating in these programs even if they draw a W-2 salary.

During the growth period before the beneficiary turns 18, accounts are restricted to eligible mutual funds or ETFs that track indices of primarily U.S. companies, such as the S&P 500. Employers must report contributions on Form W-2 using code "TA" in Box 12.

The Department of Labor clarified that Trump Accounts generally do not constitute employee pension benefit plans under ERISA, provided they are established for the benefit of employees' dependents.