Key Takeaways
- Trump Accounts have now been automatically established for eligible children under age 18 with valid Social Security numbers.
- Parents and guardians still need to claim an account before they can manage it or allow others to contribute.
- Eligible children born between January 1, 2025, and December 31, 2028, can receive a one-time $1,000 federal contribution.
- Employers may contribute up to $2,500 per employee per year to Trump Accounts for the employee or their dependents.
- Proposed IRS regulations provide more guidance for employers, but businesses should consider employee interest, costs, and administrative requirements before adding the benefit.
Earlier this year, we looked at Trump Accounts and how this new savings option might fit into a family’s financial plan or an employer’s benefits strategy. At the time, the accounts were new and many of the practical details were still taking shape.
A lot has changed since then. On October 1, the U.S. Treasury completed automatic enrollment for eligible children under 18, making accounts available to more than 60 million additional children. The IRS has also released proposed regulations that give employers more information about how Trump Account contributions could work as an employee benefit. Here’s what has changed.
Millions of Children Now Have Accounts
With automatic enrollment complete, every eligible child under age 18 with a valid Social Security number now has a Trump Account. Parents and guardians don’t have to establish the account themselves, but they do need to claim it before they can manage it or allow family members, friends, or employers to contribute.
The claiming process is handled through the official Trump Accounts app, which you can download from this site. Parents or guardians will need to verify their identity and relationship to the child, review the child’s information, and accept the account terms. For children born between January 1, 2025, and December 31, 2028, who qualify for the federal government’s one-time $1,000 contribution, claiming the account is also necessary to receive that money.
Once the account is claimed, families can decide whether they want to contribute additional funds. As we discussed in our earlier article, that decision should be considered alongside other savings priorities, including retirement, education, and shorter-term financial needs.
Employers Have More Information to Work With
When we first wrote about Trump Accounts, employer contributions were one of the more interesting possibilities, but many of the details had yet to be worked out. The IRS has since issued proposed regulations for employer contributions that provide a clearer framework for businesses considering the benefit.
Employers may contribute up to $2,500 per year to the Trump Account of an employee or an employee’s dependent. Qualifying contributions are generally excluded from the employee’s taxable income, and the $2,500 limit applies per employee, not per child.
Under the proposed regulations, an employer offering the benefit would need a separate written plan outlining eligibility, contributions, and administrative procedures. The proposal also includes employee notification, reporting, verification, and nondiscrimination requirements.
These regulations are not yet final, so businesses interested in offering Trump Account contributions will need to watch for additional guidance.
Would Your Employees Value the Benefit?
More guidance makes it easier for employers to evaluate Trump Account contributions, but whether they belong in your benefits package is a separate question. Consider your workforce and how many employees are likely to use the benefit. A business with many employees raising young children may see more interest than one with a workforce that has relatively few eligible dependents.
The benefit should also be considered alongside what you already offer and what employees value most. Depending on your employee demographics, additional retirement contributions, health benefits, compensation, or another benefit may have a greater impact.
For businesses where Trump Account contributions are a good fit, however, there is now enough information to begin a more meaningful conversation about the cost, administrative requirements, and potential value to employees.
What Happens Next?
Trump Accounts have moved quickly from a new provision in the tax law to active accounts for millions of children. Families can now claim and manage those accounts, while employers have a clearer picture of what offering contributions may involve.
There are still details being worked out, particularly for employers. We can help you understand the latest guidance and consider how Trump Accounts may affect your family or business.