New federal guidance is providing greater certainty around Trump Accounts and expanded their potential application beyond simple savings. Families, charitable organizations and employers should consider whether these accounts present new opportunities for tax-advantaged savings, charitable impact, wealth transfer planning or employee benefits strategy.
[For a review of the basic structure, contribution rules and distribution limitations applicable to Trump Accounts, see our prior alert.]
What Happened?
Effective July 4, 2026, contributions may now be made to Internal Revenue Code Section 530A Trump Accounts. Since these accounts were created by statute, the Treasury Department, the Internal Revenue Service, and the Department of Labor have issued additional guidance clarifying investment options, charitable contributions, gift tax treatment and employer-sponsored programs.
Investment Rules Continue to Take Shape
One year after Congress created Trump Accounts, regulators have provided additional guidance regarding available investments:
- The U.S. Department of the Treasury announced that initial contributions will be default invested into a low-cost ETF – State Street SPDR Portfolio S&P 500 ETF (SPYM) – with the potential for individuals to allocate to four additional ETFs afterwards.
- The IRS is currently reviewing additional proposed rules to determine the types of investments available for Trump Accounts.
- Treasury has also reported that more than six million families signed up for Trump Accounts before the official launch of the program.
With a more developed regulatory framework and live account administration now in place, Trump Accounts are evolving from a new statutory concept into a potentially useful planning tool for foundations, families and employers.
Why It Matters
Charitable Giving Opportunities
The Treasury Department recently announced that eligible philanthropic donors may contribute approved publicly traded stock to Treasury for allocation to Trump Accounts benefiting eligible children. This may create an attractive planning opportunity for:
- Foundations
- Public charities
- Corporate giving programs
- Individual donors holding appreciated securities
Organizations seeking innovative ways to support long-term wealth accumulation for children may find these accounts worth evaluating. According to Treasury, these contributions may be directed to categories of eligible recipients consistent with donor instructions, applicable law, and Treasury guidance.
Gift Tax Reporting Relief
IRS Revenue Procedure 2026-25 provides meaningful administrative relief for many donors. The IRS expressly noted that requiring gift tax reporting for numerous small Trump Account contributions could create burdens that outweigh any corresponding tax administration benefits. As a result, the new guidance establishes a safe harbor under which qualifying contributions are treated as completed gifts rather than gifts of a future interest.
For many donors, this means no federal gift tax return will be required solely because of a Trump Account contribution. To qualify for the safe harbor, the contribution generally must:
- Be a cash contribution,
- Be made by an individual taxpayer,
- Fall within the annual exclusion amount when aggregated with other gifts to that beneficiary,
- Not result in gift or GST tax liability after application of available exclusions or exemptions, and
- Be made by a donor who otherwise has no gift tax return filing requirement.
Employee Retention and Recruiting Opportunities
Employers may also consider Trump Accounts as part of a broader employee retention and financial wellness strategy – a low-cost, tax-advantaged way for businesses to invest in employees’ families while helping workers build long-term wealth for their children.
Treasury reports that more than 50 companies have already committed to offering Trump Account contributions as an employee benefit. Potential advantages include:
- Supporting employees’ families
- Differentiating compensation packages
- Enhancing recruitment efforts
- Encouraging long-term financial wellness habits in future employees
DOL Guidance Reduces ERISA Concerns
Recent Department of Labor guidance provides important clarity for employers regarding ERISA treatment of these offerings. The DOL concluded that Trump Accounts and related contribution programs generally will not be treated as ERISA-covered employee pension plans because the benefits are typically provided to employees’ dependents rather than to employees themselves. Employers may also facilitate post-tax payroll deductions into these accounts.
The same conclusion does not necessarily apply when accounts are established for minor employees themselves. Employers should continue to remain mindful of traditional payroll-deductions before implementing a program. However, this new guidance is more permissive and, unlike the traditional guidance, allows rather than prohibits employer contributions to employees’ Trump Accounts.
To remain outside ERISA plan status for these employee beneficiary Trump Accounts, participation generally must be voluntary, and employers should avoid:
- Influencing investment decisions with respect to funds contributed.
- Imposing additional restrictions on utilization of Trump Account funds.
- Characterizing the arrangement as an ERISA-covered benefit plan.
- Receiving compensation in connection with the account program.
What To Do Next
With millions of account elections reportedly submitted, dozens of employers already announcing contribution programs, and major financial institutions and service providers entering the marketplace, Trump Accounts may become an increasingly relevant part of wealth transfer, charitable giving and employee-retention planning.
For Families
Consider whether Trump Accounts could complement existing education, gifting, or multigenerational wealth-transfer strategies.
For Charitable Organizations and Donors
Evaluate whether contributions of appreciated securities to support children’s long-term savings objectives align with your philanthropic goals.
For Employers
Assess whether Trump Account contribution programs could enhance employee recruitment, retention, or financial wellness initiatives while avoiding ERISA plan status under current guidance.
For additional information about Trump Accounts and their implications for your family or business, please contact Allie Itami or your regular Lathrop GPM attorney.