The U.S. Treasury Department and IRS released proposed regulations governing how employers and employees can fund Trump Accounts, a new tax-deferred savings vehicle designed for children. The guidance outlines mechanisms for employer contributions to be excluded from an employee’s taxable income and permits workers to direct pretax compensation toward their dependent children’s accounts.
Treasury Secretary Scott Bessent announced that employers may contribute up to $2,500 annually per employee for dependent accounts, while workers can contribute pretax dollars directly from their paychecks. Trump Accounts, formally known as 530A accounts, are available to any U.S. child under 18 with a Social Security number. Children born between 2025 and 2028 are eligible for a one-time $1,000 initial deposit from the Treasury Department as part of a pilot initiative to encourage long-term wealth building.
As of Tuesday, more than 50 companies have committed to contributing to Trump Accounts for their employees, with some electing to match the government’s seed contribution. According to Bessent, approximately 7 million children have enrolled in the program as of a July 27 meeting of the Financial Literacy and Education Commission. The annual contribution limit across all sources is $5,000 per beneficiary until the year before they turn 18, with employer contributions capped at $2,500 of that total.
The proposed regulations are currently open for public comment ahead of a hearing scheduled for October, after which Treasury and the IRS will finalize the rules. Industry observers note that the regulatory framework should clarify administrative and compliance expectations for employers considering participation. A Mercer poll conducted in April found that only approximately 4% of employers surveyed expected to establish Trump Account contribution programs in the near term, with roughly two-thirds having decided against participation, though expert analysis suggests employer engagement may increase following the release of official guidance.
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