The IRS has issued guidance for the tax-deferred investment program under IRC Sec. 530A, enacted as part of the 2025 Act (formerly known as the One Big Beautiful Bill or OBBB). So-called “Trump Accounts” are a type of traditional individual retirement account (IRA) that may be established for the exclusive benefit of an eligible individual born between January 1, 2025 and December 31, 2028 (inclusive). Like other kinds of IRAs, funds in the account will grow tax free and may not be withdrawn prior to retirement age without penalty.
IRS Notice 2025-68 provides information about new Form 4547 , Trump Account Election(s). The government will contribute the initial $1,000. Parents and relatives may contribute up to $5,000 per year and employers may contribute $2,500 per year to the account of an employee or employee dependent. The Code also creates a second category of government or non-profit funded contributions known as “qualified general contributions.” Funds in the account must be invested in a qualified mutual fund or exchange-traded fund and held until the beneficiary turns 18, after which the account is treated as a traditional IRA. Contributions to the account are not deductible by the contributor and are not considered income to the recipient. In addition, allowable contributions made by a government entity, an employer, or non-profit will not increase the recipient’s basis in the account. This means they will be treated as income when withdrawn under current law. Contributions from other sources will increase a recipient’s post-tax basis in the account balance.
Gift Tax Treatment
In 2026, the IRS supplemented Notice 2025-68 with new guidance in Revenue Procedure 2026-25, establishing a safe harbor to address concerns that contributions could be treated as gifts of a future interest. Under existing law, a gift of a future interest would not qualify for the annual gift tax exclusion and would require filing a gift tax return. Under the safe harbor, a qualifying contribution to a Trump account will be treated as a present-interest gift eligible for the annual exclusion, which is $19,000 for 2026. The safe harbor applies if the donor’s total gifts to the beneficiary do not exceed the annual exclusion, the contribution creates no gift or generation-skipping transfer (GST) tax liability, and no gift tax return is otherwise required for the year. If all requirements are met, contributions made by individual donors to Trump accounts will not be subject to gift tax reporting requirements for that year.
An authorized person (generally, a parent or guardian) may apply for a Trump Account on behalf of eligible individual child at trumpaccounts.gov.
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