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Trump Accounts are an emerging employee benefit that can help employers support the long-term financial wellbeing of employees’ families. The article outlines how employers may contribute to these child-focused savings accounts and the governance steps required to offer the benefit. It also explains recent clarification around ERISA treatment, while noting that tax, payroll, investment, and reporting guidance is still developing.

Created under the One Big Beautiful Bill Act (OBBBA), Trump Accounts are a child-focused savings vehicle designed to help families begin building long-term savings earlier in life.1 The accounts began accepting contributions on July 4, 2026, and early employer interest has appeared strong.1 

That said, adoption is still in the early stages. Many employers are watching the regulatory environment before making an official decision. For plan sponsors, this may be a good time to understand the opportunity, identify open compliance questions and evaluate whether Trump Accounts could support a broader financial wellbeing strategy that fits into your organization’s goals. 

What Are Trump Accounts? 

Trump Accounts are Section 530A individual retirement accounts created for children under age 18.3 They are intended to provide a tax-deferred savings vehicle that can receive contributions from multiple sources, including family members, employers, charities, and government programs. 

Eligible U.S. children born from January 1, 2025 – December 31, 2028, may also receive a one-time $1,000 pilot contribution from the U.S. Treasury.4  Annual contributions are capped at $5,000 per child across all sources.4 That means contributions from parents, employers, charities, or other eligible contributors all count toward the same annual limit. 

Funds grow tax-deferred while the child is a minor. When the child turns 18, the account converts to a standard IRA. 

For families, the appeal is straightforward: a way to begin saving earlier for a child’s long-term financial future. For employers, the opportunity is more strategic. Trump Accounts may become one more way to support employees’ families and strengthen the overall value of their benefits package. 

How Employer Contributions Work 

Section 128 of the new law creates a path for employer contributions to Trump Accounts.2

Employers may contribute up to $2,500 per year per employee, tax-free, toward Trump Accounts for eligible dependent children. That employer contribution counts toward the child’s total $5,000 annual contribution cap.2

Employers generally have two funding paths to consider: 

  • Direct Employer Contributions 
    The employer contributes directly to an eligible child’s Trump Account 
  • Employee Salary Reduction Via Section 125 Cafeteria Plan 
    Employees contribute directly through salary reduction contributions for dependent children 

From a tax perspective, employer contributions are generally excluded from the employee’s gross income and may be deductible as a business expense for the employer. This makes the structure potentially attractive, but employers should evaluate the tax, payroll, and administrative details carefully before moving forward. 

Governance Requirements: The TACP 

Employers that want to contribute must do so through a written Trump Account Contribution Program, or TACP. 

A TACP should address key program terms, including: 

  • Employee eligibility5
  • Contribution design2
  • Notice requirements5
  • Nondiscrimination rules5
  • Coordination with custodians and payroll6
  • How contributions interact with the annual account limit6

This governance structure matters. Even though Trump Accounts are not traditional retirement plan accounts, employer involvement creates compliance and administrative obligations. A clear written program can help employers apply the benefit consistently and prepare for future guidance. 

ERISA Status: A Key Question Has Been Clarified 

One of the biggest early questions for employers was whether Trump Account Contribution Programs would be treated as pension plans under the Employee Retirement Income Security Act, or ERISA. 

On June 17, 2026, the Department of Labor issued Technical Release 2026-02, confirming that TACPs are generally not ERISA pension plans.7 That clarification removes a meaningful adoption barrier for employers that were concerned about taking on ERISA plan obligations. 

This does not eliminate every compliance question. Employers still need to monitor IRS and Treasury guidance. 

What Guidance Is Still Developing? 

Trump Accounts are live, but the rulemaking process is still ongoing. 

Key developments so far include: 

  • December 2, 2025: IRS Notice 2025-68 provided initial guidance on account setup, contribution types, and coordination with Section 128.2
  • March 2026: Proposed regulations under Sections 530A and 6434 addressed election mechanics and the federal pilot contribution, while reserving several contribution and reporting rules. 
  • June 17, 2026: Department of Labor Technical Release 2026-02 clarified that TACPs are generally not ERISA pension plans.7
  • July 4, 2026: Trump Accounts officially launched and began accepting contributions.1
  • August 11, 2026: Proposed regulations detailing the operating framework required for an employer-funded TACP are issued including details on contribution limits and tax treatment, required program design, and non-discrimination testing.
  • August 20, 2026: IRS issued proposed investment rules10

The Bottom Line 

Trump Accounts may become a meaningful new family savings benefit for your employees. For employers, they offer a potential way to support financial wellbeing, may help support recruitment and retention, and help employees invest in their children’s long-term future. 

But this is still an emerging area. The Department of Labor’s ERISA clarification makes it easier for employers to explore a TACP, but recent guidance is still developing.  

Trump Accounts are new, but the underlying goal is familiar: helping employees and their families build greater financial security over time. Employers that take a thoughtful approach now will be better positioned to decide whether this benefit belongs in their future strategy. 

Interested in learning more about Trump Accounts? Explore Trump Accounts: The New Savings Vehicle and How You Can Navigate the Options.

This information is provided for educational purposes only and is not intended as tax, legal, or investment advice. Trump Account rules and tax treatment are subject to change and may vary based on individual circumstances. Employers and individuals should consult their tax, legal, and financial professionals regarding their specific situation. Investment advice offered through OneDigital Investment Advisors LLC. 

Sources:

  1. Congress.Gov. Trump Accounts: Overview and Policy Considerations 
  2. IRS: Treasury, IRS Guidance on Trump Accounts Established under the Working Families Tax Cuts; Notice Announces Upcoming Regulations 
  3. IRS Form 4547 Instructions and IRS Notice 2025-68 
  4. IRS Newsroom: Notice 2025-68 and Federal Register Proposed Regulations 
  5. U.S. Department of Labor: Technical Release 2026-02 
  6. Department of the Treasurer: REG-101355-26 
  7. U.S. Department of Labor: EBSA Technical Release 2026-02 
  8. MERCER: Trump Accounts: Are Employers Responding? 
  9. Federal Register: Employer Contributions to Trump Accounts and Nondiscrimination Rules for Dependent Care Assistance Programs 
  10. Treasury, IRS issue proposed regulations on eligible investments for Trump Accounts under the Working Families Tax Cuts | Internal Revenue Service 
Publish Date:Oct 15, 2026Categories:Retirement Plan Services, Retirement Planning