The US Department of the Treasury and the Internal Revenue Service (IRS) on August 11 issued guidance on employer-sponsored Trump Account contribution programmes, including arrangements that allow employees to make pre-tax contributions to accounts set up for their dependents.
The new guidance provides a framework for employers that want to contribute directly to Trump Accounts for employees or their dependents. Treasury Secretary Scott Bessent said the rules will allow employers to contribute up to $2,500 tax-free each year for employees’ dependents.
“Trump Accounts are giving American families a new way to build wealth from day one,” Bessent said.
Employees can make pre-tax contributions
Under the Working Families Tax Cuts, employees can make pre-tax contributions to their dependents’ Trump Accounts through an employer cafeteria plan.
The law also allows certain employer contributions to Trump Accounts to be excluded from an employee’s gross income.
The Treasury said the new options could give businesses a tax-preferred benefit that can help employees build wealth for their families while potentially supporting employee recruitment and retention.
More than 50 companies have committed
More than 50 companies have already committed to making contributions to Trump Accounts for their employees, according to the Treasury.
The department said the employer contribution option could also benefit children who are not eligible for the initial $1,000 Treasury contribution, as they could still receive tax-free money through an employer-sponsored Trump Account programme.
What employers need to do
Employers seeking to establish a Trump Account contribution programme generally must maintain a separate written plan and comply with several administrative requirements.
These include:
-Following certification procedures covering the beneficiary’s age and dependent status.
-Verifying that the account receiving the contribution is a Trump Account.
-Providing notices to employees.
-Providing annual statements to employees.
-Reporting contributions to the Trump Account trustee.
The proposed regulations also require employer programmes to satisfy applicable nondiscrimination requirements.
Rules aim to prevent preferential treatment
Under the proposed regulations, eligibility to participate in Trump Account contribution programmes, as well as contributions and benefits, generally cannot discriminate in favour of highly compensated employees or their dependents.
The regulations also clarify how nondiscrimination rules apply to employer-sponsored Trump Account programmes and dependent care assistance programmes.
IRS CEO Frank J. Bisignano said the agency had worked with more than 50 major employers to prepare them for the new option.
Public comments due by September 25
The Treasury and IRS guidance has been issued as proposed regulations, meaning the rules are open to public feedback.
Comments on the proposed regulations must be submitted by September 25, 2026.
A public hearing has been scheduled for October 15, 2026. Requests to speak and outlines of topics for discussion must be submitted by October 13.
How to open a Trump Account
Parents, guardians and other authorised individuals can use an IRS Individual Online Account to complete Form 4547, Trump Account Election(s), to open an account for a child who has a Social Security number.
The election must be made before the calendar year in which the child turns 18.
Who can get the $1,000 pilot contribution?
For the pilot programme, an eligible parent or authorised individual can elect a $1,000 Treasury contribution if the child is a US citizen born between 2025 and 2028.
The election can be made using Form 4547.
