On December 2, 2025, the Department of the Treasury and the Internal Revenue Service issued a notice of proposed rulemaking regarding the new “Trump accounts,” which were created by the One Big Beautiful Bill Act. The following questions and answers provide some of the basics of these new Trump accounts:
Q1. What is a Trump account?
A Trump account is a type of traditional individual retirement account (IRA) that is established for the exclusive benefit of an eligible individual. An eligible individual is any individual (a) for whom an election is made to establish a Trump account, (b) who has not attained age 18 before the close of the calendar year in which the election is made, and (c) for whom a social security number has been issued before the date of the election.
A Trump account is subject to certain special rules inapplicable to other individual retirement arrangements, most of which apply only during the period that ends before January 1 of the calendar year in which the account beneficiary attains age 18 (the so-called, “growth period”). For example, a child born on October 1, 2025, would turn age 18 on October 1, 2043, and therefore the last day of the growth period with respect to the child would be December 31, 2042.
The special rules that apply only during the growth period include: (a) funds in a Trump account can be invested only in eligible investments, (b) a Trump account has a separate contribution limit from other individual retirement arrangements, (c) a Trump account is generally not allowed to make distributions, (d) no deduction by an individual is allowed for any contribution to a Trump account, and (e) trustees of Trump accounts have similar but different reporting requirements from trustees of other IRAs.
Q2. I understand the federal government will contribute $1,000 to Trump accounts. Is this correct?
Yes. Upon an election under a pilot program, $1,000 will be paid by the Secretary of the Treasury to the Trump account of an eligible child.
Q3. Who is an “eligible child”?
An eligible child means a qualifying child who is born after December 31, 2024, and before January 1, 2029, who is a U.S. citizen, and for whom no prior pilot program election has been made. Additionally, the eligible child must have a social security number that is included with the election.
Q4. What types of contributions can be made to a Trump account for an eligible child?
During the growth period, there are five types of contributions that can be made to a Trump account: (1) a pilot program contribution from the Secretary of $1,000 for an eligible child, (2) qualified general contributions (funded by states or political subdivisions), the United States, the District of Columbia, Indian tribal governments, or Internal Revenue Code Section 501(c)(3) tax-exempt organizations) for members of a qualified class of account beneficiaries, (3) employer contributions that are not includible in the gross income of the employee under Code Section 128 (Section 128 employer contributions), (4) qualified rollover contributions, and (5) contributions from other sources (such as the account beneficiary, parents, or any other person).
Pilot program contributions, qualified general contributions, and qualified rollover contributions are not subject to an annual contribution limit. However, all other contributions (that is, Section 128 employer contributions and contributions from other sources) during the growth period are subject to an aggregate annual limit of $5,000 (subject to cost-of-living adjustments after 2027).
With respect to the permitted employer contributions, employer contributions paid to a Trump account of an employee or a dependent of an employee are not includible in the employee’s income. Such contributions are limited to $2,500, subject to cost-of-living adjustments after 2027. Employer contributions must be made pursuant to a Code Section 128(c) Trump account contribution program. Requirements similar to requirements that apply to a dependent care assistance program (regarding discrimination, eligibility, notification, statements, and benefits) apply to a Trump account contribution program.
Q5. How are funds in the Trump account required to be invested?
During the growth period, funds in a Trump account may be invested only in eligible investments. An eligible investment, generally, is a mutual fund or exchange traded fund (ETF) that tracks an index of primarily U.S. companies, such as the Standard and Poor’s 500 stock market index, does not use leverage, does not have annual fees and expenses of more than 0.1 percent of the balance of the investment in the fund, and meets other criteria that the Secretary determines appropriate.
Q6. What happens after the “growth period” mentioned above under Question 1?
After the growth period, nearly all of the special rules for Trump accounts (including those relating to contributions, investments, distributions, and trustee reporting) cease to apply. Accordingly, after the growth period, Trump accounts generally will be subject to the normal rules that apply to other traditional IRAs (such as the rules related to contributions, distributions, required minimum distributions, rollovers, Roth conversions, ordinary income taxation, and reporting). Nevertheless, a Trump account continues to be a Trump account after the growth period.
Q7. What rules apply to employer contributions made to a Trump account?
Code Section 128(a) provides that an amount paid by an employer as a contribution to the Trump account of an employee or of any dependent of such employee pursuant to a “Trump account contribution program” is excludible from income of the employee. The amount excludible with respect to any employee shall not exceed $2,500 (subject to cost-of-living adjustments after 2027).
This annual limit is per employee and not per dependent of the employee. For example, if an employee has two or more children that have Trump accounts, an employer with a Trump account contribution program may only contribute up to $2,500 in the aggregate for 2026 to those Trump accounts.
A “Trump account contribution program” means a separate written plan of an employer for the exclusive benefit of its employees to provide contributions to the Trump accounts of such employees or dependents of such employees.
The Departments of Labor and Treasury anticipate issuing separate guidance on how to structure employer contributions to Trump accounts to ensure that they are not subject to the Employee Retirement Income Security Act of 1974 (ERISA) coverage framework.
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