Trump Accounts Update: Treasury Issues Proposed Regulations

Legal Alert

August 10, 2026

As discussed in our prior Alert, employers may contribute up to $2,500 per employee each year to Trump Accounts under a qualifying employer contribution program. These contributions are not included in the employee’s taxable income for federal income tax purposes, but generally remain subject to payroll taxes. They also count toward the $5,000 annual contribution limit that the employer, parents, relatives, and/or other individuals may contribute to a child’s Trump Account.

Proposed regulations, which are scheduled to be published on August 11, 2026, address several of the open questions for employers. Under the proposed regulations:

An employer contribution program must be established under a separate written plan document.
The $2,500 employer contribution limit applies per employee, not per child. The limit also applies across all employers if an employee works for more than one employer during the year.
Employers may permit employees to make pre-tax contributions through a Section 125 cafeteria plan to a dependent’s Trump Account. The cafeteria plan must describe the benefit and permit employees to prospectively change or revoke their elections at least monthly.
The employer contribution program must satisfy nondiscrimination rules that are intended to prevent highly compensated employees from receiving disproportionately greater benefits.
Employers generally must provide eligible employees with reasonable notice of the program and report contributions on Form W-2.
Employers may not require employees to use a particular Trump Account trustee. This could make the program more difficult to administer because employers may have to send contributions to, and coordinate with, multiple trustees where employees or their dependents maintain their Trump Accounts.

Employers considering a contribution program may wish to begin evaluating the required plan document, payroll and cafeteria plan administration, coordination with Trump Account trustees, nondiscrimination testing, and employee communications.

Although the regulations are proposed, employers may rely on them before final regulations are issued. Comments are due 45 days after publication and a public hearing is scheduled for October 15, 2026.