An Update on Trump Accounts
The 250th anniversary of the Declaration of Independence also marks the beginning of the funding window for Trump Accounts—the new retirement savings accounts for children under 18, funded by family, employers, and others.
As we said earlier this year, “For parents of children born in these years, it is truly one of the rare no-brainer financial decisions: open a Trump Account! Even if you never contribute any of your own money, you don’t want to pass up $1,000 that can grow tax-deferred for decades.”
These accounts take advantage of what children are rich in—time, and the potential for compound investment growth that time affords.
Although parents and guardians have been able to open these accounts since January, July 4, 2026 was the first day that contributions could actually be deposited.
This six-month delay proved useful, as banks, custodians, and federal government agencies needed to get their regulatory ducks in a row. While several technical questions remain, such as fee caps, whether early withdrawal penalty exceptions will apply for education and first-time home purchases, and the impact on FAFSA eligibility, at least two significant regulatory loose ends have been tied up.
Before examining these regulatory “fixes,” a quick refresher on how these accounts are designed to work. (For a longer primer on the basics of Trump Accounts, see our January Insight.) A Trump Account may be opened for any child with a Social Security number who is under age 18 for the entire calendar year. In addition, anyU.S. citizens born between Jan 1, 2025 and Dec 31, 2028, will be eligible to receive a $1,000 contribution from the federal government.
The contributions limits are currently set at $5,000 per account per year, with corporate contributions capped at $2,500 per account per year. Charities and government entities have no contribution limits. Individual contributions to Trump Accounts are not tax-deductible, but they are not included in the beneficiary's taxable income. Funds must be invested in a low-cost mutual fund or exchange traded fund that tracks a major index, and assets remain locked up until age 18, at which point the account is rolled over into a traditional IRA.
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No Gift Tax Filing Required (Phew)
Since the roll-out of these accounts earlier this year, many potential donors and their accountants have worried that contributions to Trump Accounts would require contributors to file a gift tax return (since contributions could be treated as “gifts of a future interest,” which would not qualify for the annual gift tax exclusion).
At the eleventh hour, however, the IRS and Treasury issued News Release IR‑2026‑80 and Rev. Proc. 2026‑25. This formal guidance creates a safe harbor so that contributions to Trump accounts will be considered “present-interest” gifts eligible for the annual exclusion if: 1) the donor’s total gifts to the beneficiary for the year do not exceed the annual exclusion amount (currently $19,000 per recipient per gifter); 2) the contribution does not create gift‑tax or GST‑tax liability; and 3) no gift‑tax return is otherwise required for that year. If these conditions are met, contributions to Trump Accounts do not trigger gift‑tax reporting requirements.
Employer Contributions Made Easier
The Department of Labor also recently provided guidance to employers interested in offering Trump Account contributions as an employee benefit. When Congress enacted the One Big Beautiful Bill that created the Trump Account framework, the legislation did not explicitly state whether employer contributions (excluded from the employees’ gross income) to an employee child’s Trump Account would trigger ERISA obligations.
In the June 17, 2026 Technical Release 2026-02, the DOL confirmed that these employer contributions will not create an ERISA-covered plan. The logic is that the contribution benefits are established for the benefit of dependents, not employees themselves, and that employers do not exercise any meaningful control over account administration or investment decisions. In the less common scenario where the beneficiary is also the employee (as with 16- or 17-year-old workers), the rules are less straightforward, but the DOL has also established a safe harbor framework addressing those accounts.
In the coming months, we will continue to monitor developments and provide any meaningful updates as agencies finalize rules around some of these open issues. In the meantime, if you haven’t yet opened a Trump Account for a minor in your life, the process is relatively simple. First, an “authorized individual” (parent, guardian, adult sibling or grandparent of the child) files IRS Form 4547. Next, you will need to download the Trump Accounts app at trumpaccounts.gov to open an account. Once the IRS has processed the Form 4547, your Trump Account app will notify you that your account is ready to be funded.
To make a contribution (also done through the app), you can use a debit card (for immediate funding) or initiate a bank transfer (which can take 4-5 business days to fund). Once funded, the account will be automatically invested in State Street SPDR Portfolio S&P 500 ETF (symbol: SPYM), a low-cost index fund that tracks the S&P 500 and that is included in nearly all of Tableaux Wealth’s model portfolios. The Treasury Department has selected four additional low-cost ETFs, and once the investment-election functionality becomes available, account holders will be able to allocate part or all of their assets among those options.