On August 11, 2026, the Department of Treasury and Internal Revenue Service (IRS) released proposed regulations with guidance for employers who have elected to make contributions to Trump Accounts for employees or their dependents. Trump accounts are treated like individual retirement accounts (IRAs). Employers have the option to contribute up to $2,500 per year (adjusted annually after 2027) to the Trump account of an eligible employee or employee’s dependent. The employer contribution is excluded from the employee’s gross income for federal income tax withholding purposes.
Employers that have chosen to provide contributions to Trump Accounts should be aware of the following key points from the proposed regulations:
- Written Plan: To set up a valid Trump account contribution program, there must be a separate written plan. The separate written plan must specify the classes of eligible employees; the rules governing employer contributions including the amount and whether contributions may be made through a Section 125 cafeteria plan; the procedures for an employee to designate the Trump account to receive contributions; certification, notice, and reporting procedures; the plan year; the procedure for correcting administrative failures; and the procedure for notifying employees if their Trump account contributions are subsequently determined to be includable in gross income.
- Reasonable Notification: Employers must provide reasonable notification to all eligible employees of the availability and terms of the Trump account contribution program.
- Written Statement for Employees: Employers must furnish a written statement to employees, on or before January 31, showing the amount of Trump account contributions made during the previous calendar year. This requirement may be satisfied by including the amount on the Form W-2.
- Certifications: Employers are allowed to rely on an employee’s certification that the employee or the employee’s dependent is the beneficiary; the beneficiary’s date of birth; and the beneficiary is eligible to receive a contribution for that calendar year. The employer may rely on this certification unless the employer has actual knowledge the certification is incorrect. However, an employer may not rely solely on an employee certification to establish that the recipient account is a valid Trump account. The employer must use a method reasonably designed to verify that the contribution is made to a valid Trump account. For example, the employee could provide the employer with a unique identifying number that corresponds to a particular Trump account, which the employer could then use to verify the account.
- Notification to Trustees: When an employer makes a contribution to a Trump account, the employer is required to notify the Trump account trustee. If the employer subsequently determines the contribution should not have gone to a Trump account, the employer must notify the trustee. A trustee is a bank or non-bank institution that administers Trump accounts on behalf of beneficiaries.
- No Limitations on Trustees: Employers cannot limit contributions to only Trump accounts held by a particular trustee or trustees.
- Cafeteria Plan Contributions: A Trump account contribution program may allow an employee to make a contribution via pre-tax salary reduction under a Section 125 cafeteria plan if the contribution is made to the Trump account of the employee’s dependent but not if it is made to the Trump account of the employee. This is because a contribution to an employee’s Trump account would provide deferred compensation, which is prohibited under Internal Revenue Code section 125.
- Nondiscrimination Rules: Trump account contribution programs must comply with the nondiscrimination rules under Internal Revenue Code section 129. Eligibility to participate and the contributions and benefits under the program must not discriminate in favor of highly compensated employees or their dependents.
The IRS is seeking electronic or written comments on the proposed regulations. Commet period closed September 25, 2026. A public hearing on the proposed regulations has been scheduled for October 15, 2026. Requests to speak and outlines of topics to be discussed at the hearing must be received by October 13, 2026. More information is in the proposed regulations.
