News Archive

"As we approach 2026, employers sponsoring cafeteria plans may take advantage of several important developments that permit optional changes to plan design and administration.... [1] Dependent Care FSA limit increase.... [2] Potential introduction of Trump Accounts.... [3] Health FSA and carryover limit adjustments.... [4] Nondiscrimination testing considerations."  MORE >>

"Notice 2025-68 addresses several topics of interest to employers, including: [1] Employers can offer employees the option to fund accounts for their dependent children via pretax contributions under an Internal Revenue Code (IRC) Section 125 cafeteria plan. [2] The $2,500 limit on employer contributions that are non-taxable to the employee is an annual limit that applies per employee regardless of how many dependent children the employee has.... [3] Account trustees -- not employers -- are responsible for ensuring that aggregate individual and employer contributions don't exceed the annual $5,000 limit."  MORE >>

"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."  MORE >>

"Employers who wish to make contributions to Trump Accounts starting next year will be required to establish a separate written plan (and, if applicable, may be required update its Code Section 125 cafeteria plan document to enable employee pre-tax contributions). Employers may also consider other steps that may be required to operationalize contributions."  MORE >>

"Employers may make contributions of up to $2,500 (subject to cost-of-living adjustments after 2027) per calendar year to the Trump account of an employee (or the employee's dependent) that will be excluded from the employee's gross income. An employer must make contributions under a 'Trump account contribution program,' which is a separate written plan maintained by the employer for the exclusive benefits of its employees that meets requirements regarding discrimination, eligibility, notification, statements and benefits similar to the requirements of a dependent care assistance program under Section 129 of the Internal Revenue Code."  MORE >>

"Financial institutions that currently offer IRAs will want to consider whether they want to add this new account option. Although the rules are similar to IRAs, there are a number of nuanced differences that will require careful set-up.... Employers should consider whether they want to add Trump Account contributions to their employee benefit line-up. Employers who do so will need to establish a Section 128(c) Trump Account contribution program."  MORE >>

"Employers interested in offering a [Trump Account Contribution Program (TACP)] benefit now have scaffolding upon which to start building out their programs. For example, employers will want to consider whether to allow funding through cafeteria plan salary reductions, as well as the processes for tracking contributions and communicating the new benefit to employees. Meanwhile, the federal government has established a new website with information about TAs and has issued drafts of IRS Form 4547 (Trump Account Election(s)) and related instructions."  MORE >>

"[Notice 2025-68] provides Q&As addressing the various Trump account requirements, along with a number of important clarifications regarding: [1] how the accounts are established, [2] available contribution sources (including the pilot program and employer programs), [3] distribution and investment restrictions, [4] reporting requirements, [and] [5] the (in)applicability of ERISA for employer programs."  MORE >>

"Beyond accepting the free $1,000 deposit from the government, advisors generally see more upside from existing UTMA (Uniform Transfers to Minors Act) accounts and 529 plans designed to fund education. Both options have higher contributions limits than Trump Accounts and come with different tax structures."  MORE >>

Dec. 2025. "Use Form 4547 to make the election to establish an initial Trump account for the exclusive benefit of a child who is eligible for a Trump account. Also use Form 4547 to make an election for a $1,000 pilot program contribution from the U.S. Treasury to a child's Trump account if they are eligible for the contribution." [Also available: Draft IRS Form 4547: Trump Account Election(s)]  MORE >>

"While there are still several unanswered questions regarding implementation and administration of Trump accounts, the guidance provides employers more clarity on how they can include Trump account contributions among the benefits offered to employees. The IRS included a comment request in Notice 2025-68 on several issues regarding these accounts, and ... additional guidance from IRS [is expected]."  MORE >>

"A Trump account contribution program may be offered via salary reduction under a section 125 cafeteria plan if the contribution is made to the Trump account of the employee's dependent but not if the contribution is made to the Trump account of the employee.... The Treasury Department will select one or more financial institutions as a financial agent to serve as trustee of the initial Trump accounts."  MORE >>

"Notice 2025-68 provides the first round of helpful guidance for IRA providers interested in maintaining these accounts, and employers interested in funding these accounts for their employees.... Most notable is the confirmation that parents can make pre-tax salary deductions (up to $2,500, indexed) through a cafeteria plan to contribute to their child's Trump account. Of course, employers can also simply elect to contribute up to $2,500 (indexed) tax-free to the Trump accounts of their employees under age 18 or to the accounts of their employees' dependents under age 18."  MORE >>

"A website for Trump accounts has been created, and additional information on how to sign up will be released on Dec. 17. At least a few details will need to be sorted out, including eligible custodians, acceptable investment strategies, the status of foreign securities in pooled vehicles, and enforcing the prohibition on early withdrawals, among other issues."  MORE >>

44 pages. "This notice informs taxpayers that the [Treasury Department] and the [IRS] intend to propose regulations providing guidance with respect to section 70204 of ... the One, Big, Beautiful Bill Act (OBBBA). Section 70204 of OBBBA, which applies to taxable years beginning after December 31, 2025, added section 530A and related sections regarding Trump accounts to the Internal Revenue Code. Section II of this notice provides a general overview of how Trump accounts work. Section III of this notice addresses certain initial questions related to Trump accounts that the Treasury Department and the IRS intend to address in the forthcoming proposed regulations. The Treasury Department and the IRS expect that the forthcoming proposed regulations will be consistent with the guidance set forth in section III of this notice. Section IV of this notice contains a request for comments regarding Trump accounts. "  MORE >>

"[Notice 2025-68] addresses certain areas of interest to prospective trustees of Trump Accounts and to those individuals, such as parents and guardians, who would like to establish and/or contribute to these accounts. The notice requests comments on numerous issues related to Trump Accounts. The IRS is posting a draft version of Form 4547, Trump Account Election(s) ... When final, the new form can be used to establish a Trump Account and to enroll in the pilot program."  MORE >>

"ICI recommended that Treasury authorize many custodians and providers to participate in the market for Trump Accounts ... ICI also pushed for Treasury to interpret the statute to permit as many investing strategies as possible.... State Street Global Advisors also noted that 'guidelines are needed on the process of converting Trump accounts to traditional IRAs.' ... [The Aspen Institute asked] that Trump Accounts [be] categorically disregarded in determining eligibility for means-tested public assistance programs[.]"  MORE >>

"In most cases, other vehicles offer superior tax benefits, higher contribution limits and greater portfolio customization. Advisers shouldn't be afraid to make these comparisons. But they need to be very careful if the alternatives they recommend to a Trump Account would earn them fees or other compensation. Doing so in a haphazard way could put them in the SEC's fiduciary crosshairs."  MORE >>

"The OBBBA requires custodians to maintain a clear separation between the investment in the contract (basis) and taxable amounts for a Trump account.... Custodians that do not offer 529s or ESAs need to decide whether to invest in building tracking systems or to opt out of offering Trump accounts.... The IRS can ease the transition to these by permitting trustee-to-trustee transfers to traditional IRAs at age 18, ensuring accurate basis reporting and preventing tax errors."  MORE >>

"Agency guidance is needed to answer ... [1] How employers can substantiate that employees or their dependents are eligible to receive contributions for the year, and that the receiving account is indeed a Trump Account. [2] Whether employers have any obligation to confirm the employer contribution won't cause the receiving account to exceed the annual contribution limit when made. [3] Methods for performing nondiscrimination testing and correcting testing failures. [4] Whether employers are permitted to recoup erroneous contributions and how to do so."  MORE >>

"Fortunately, since Trump account contributions can't be made before July 4, 2026, the IRS should have enough time to issue guidance....[1] How will Trump accounts be established? ... [2] How will elections be made?  ... [3] Will Roth conversions be allowed starting in the age-18 year? ... [4] Will Trump account funds be subject to required minimum distribution (RMD) rules?  ... [5] Is the employer Trump account contribution limit a lifetime limit or an annual limit? ... [6] Do employer contributions count towards the $5,000 limit? "  MORE >>

"[M]ore guidance is necessary before employers can properly consider whether [this] is a worthwhile benefit to offer employees.... [1] Is the $2,500 employer contribution limit an annual limit or lifetime limit? [2] Is it possible for an employer to contribute more than $2,500 if the excess is included in the employee's gross income for the year? ... [3] May an employer make contributions only on behalf of employees who establish Trump Accounts with a trustee selected by the employer? ... [4] How would an employer run nondiscrimination testing? [5] What happens if a Trump Account Contribution Program fails nondiscrimination testing?"  MORE >>

"If the employer chooses to make contributions, employers must have a written plan that follows certain rules such as the prohibition of discrimination against certain income groups and notice to eligible employees. Contributions could also be made by an employer to an employee who is under the age of 18 and has their own Trump account. Employers may choose to contribute up to $2,500 either directly to the employee or the employee's dependent."  MORE >>

"Contributions to Trump Accounts are not permitted until July 2026, giving plan sponsors time to evaluate their approach and prepare accordingly.... [G]overnment entity and employer contributions are fully taxable upon withdrawal, while parent contributions require basis tracking.... Employers may contribute up to $2,500 (indexed) per employee on a tax-free basis.... [C]ontributions from states, local governments and charitable organizations ... will not count toward the $5,000 annual limit. "  MORE >>

"Starting July 4, 2026, employers can contribute up to $2,500 tax-free (indexed) each calendar year to the [Trump Accounts (TAs)] of employees' dependents.... [T]here is no option for employees to contribute through payroll on a pre-tax basis to TAs ... Nor is there the option to embed tax-free TA contributions in a broader arrangement such as flex credits through a cafeteria plan or a lifestyle spending account (LSA)."  MORE >>