IRS initial thoughts on Trump Accounts in preparation for rulemaking
On December 2, 2025, the IRS published Notice 25-68 with initial thoughts on Trump Accounts as they prepare to issue rules. They are requesting comments on this initial round of considerations and other items they should address as they contemplate rulemaking.
Who this applies to
Employers of any size interested in contributing to and/or allowing employees to make pre-tax paycheck contributions to Trump Accounts in 2026.
Key details
Trump Accounts are a new type of individual retirement account (IRA) for minors, subject to some unique rules. For example, the minor need not have income to allow for contributions, which is different from other IRAs that impose an income requirement to contribute.
While employers would not sponsor or open Trump Accounts for minor employees or the minor dependents of employees, there is an opportunity for employers to adopt a written §128 Trump Account Contribution Plan for the purpose of making employer contributions to Trump Accounts, and/or amending the employer’s §125 cafeteria plan to allow employees to make pre-tax paycheck contributions toward Trump Accounts.
Some clarifications provided at this time include:
- Individuals will open accounts online at trumpaccounts.gov or by making an election on IRS Form 4547, Trump Account Election(s)
- No contributions are allowed until July 4, 2026
- Employer contributions (capped at $2,500 for 2026) are per employee, not per dependent, and count towards the annual $5,000 contribution cap. (As a reminder, a §128 Trump Account Contribution Plan must be in writing, and includes rules similar to the §129 rules and non-discrimination testing that apply to Dependent Care Assistance Plans (DCAPs) ).
- Employers can amend their §125 cafeteria plan to allow employees to contribute pre-tax from their paychecks to Trump Accounts of their dependent children, but employees who are minors cannot make §125 pre-tax contributions to their own Trump Account as that is a prohibited deferral of compensation. (Allowing employees to contribute pre-tax will mean §125 non-discrimination testing will include these contributions.)
There is still half a year until contributions are allowed to Trump Accounts. So, at this stage, employers can start deciding whether this is a benefit they want to contribute toward and/or allow employees to contribute toward pre-tax.
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