The U.S. Treasury Department and Internal Revenue Service unveiled proposed regulations this week establishing how employers and employees can contribute to Trump Accounts, a recently created tax-deferred savings vehicle designed for dependent children. Treasury Secretary Scott Bessent announced that the guidance permits employer contributions of up to $2,500 annually per employee, excluded from an employee’s gross income, while also allowing workers to direct pretax payroll dollars into their dependents’ accounts.
Trump Accounts, formally known as 530A accounts, are accessible to any U.S. child under 18 with a Social Security number. Children born from 2025 through 2028 qualify for a one-time Treasury deposit of $1,000 as part of a pilot initiative to encourage long-term savings. According to Bessent, approximately 7 million children have enrolled in the accounts as of late July. Overall contribution limits are capped at $5,000 annually per beneficiary, with employer contributions counting toward this ceiling.
The proposed regulations follow a notice of proposed rulemaking released by Treasury and the IRS that details the mechanics for employers to establish Trump Account programs. The regulatory process includes a public comment period and a scheduled hearing in October before the agencies finalize the rules. As of the announcement, more than 50 companies have pledged to make Trump Account contributions for their employees, with some committing to match the government’s initial $1,000 seed deposit.
Employer adoption rates have been relatively modest thus far. A Mercer survey of approximately 350 U.S. employers conducted in April found that only about 4% anticipated implementing a Trump Account contribution program in the near term, while roughly two-thirds had elected not to participate. However, benefits consultants anticipate that the Treasury’s regulatory guidance may expand employer interest in the initiative. Melissa Elbert, a partner specializing in wealth solutions at consulting firm Aon, indicated that clarified administrative and compliance frameworks should encourage additional companies to consider participation.
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