trump accounts

  • Noelle Merwin
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IRS Provides Gift Tax Filing Relief for Certain Trump Account Contributions
IRS Provides Gift Tax Filing Relief for Certain Trump Account Contributions 266 266 Noelle Merwin

The IRS has issued Revenue Procedure 2026-25, providing gift tax reporting relief for certain individuals who contribute to Trump Accounts established for eligible children. Under the new safe harbor, qualifying contributions will be treated as completed gifts that are not future interests in property and that qualify for the annual per donee gift tax exclusion. This means that, if all requirements are met, donors will not need to file a federal gift tax return solely because they contributed to a Trump Account.

As a refresher, Trump Accounts are a new type of individual retirement account created under IRC §530A for eligible children. Because account beneficiaries generally cannot access the funds during the account’s “growth period,” there was concern that contributions could be treated as future-interest gifts. Future-interest gifts generally do not qualify for the annual gift tax exclusion and can require Form 709 reporting, even when no tax is ultimately due. The new IRS guidance is intended to reduce that compliance concern for qualifying donors.

To qualify for the safe harbor,

  1. The donor must be an individual.
  2. The donor’s only taxable gifts for the year must be cash, check, money order, or electronic funds transfer contributions to one or more Trump Accounts and each contribution must be made before the calendar year in which the account beneficiary turns age 18.
  3. The donor’s total gifts to each beneficiary, including Trump Account contributions, must not exceed the annual gift tax exclusion amount, which is $19,000 for 2026.
  4. Contributions do not create gift or generation-skipping transfer tax liability after applying the donor’s available exemptions.
  5. No gift tax return is otherwise required or filed for that year. For example, if a donor makes other reportable gifts or needs to make certain GST elections, Form 709 may still be required.

For families, grandparents, and others considering contributions to Trump Accounts, this guidance removes a significant reporting concern—but the rules are technical. Before making larger gifts or coordinating Trump Account contributions with other estate or gift planning, please consult your Smolin professional to confirm whether the safe harbor applies.

 

  • Noelle Merwin
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New Trump Accounts – What You Need to Know
New Trump Accounts – What You Need to Know 266 266 Noelle Merwin

Included in the One Big Beautiful Bill (OBBB) signed into law July 4, 2025 was the creation of a tax-advantaged savings account for children called “Trump accounts”. A Trump account is treated like an IRA with the following stipulations:

  • Must be created for the exclusive benefit of an individual who has not reached age 18 by the end of the year.
  • Must be designated as a Trump account at the time it is established.
  • No contributions will be accepted before July 4, 2026.
  • No distribution will be allowed before the year in which the beneficiary reaches age 18.
  • Contributions are limited to $5,000 per year, adjusted annually for inflation after 2027.
  • Employers can contribute up to $2,500 annually (adjusted annually for inflation after 2027) to a Trump account of an employee or an employee’s dependents that will be excludible from the employee’s gross income.
  • A one-time payment of $1,000 will be made by the Treasury to a Trump account for a child born during the period January 1, 2025 – December 31, 2028 if an election is made on the parents Form 1040 for the year of birth. This is referred to as a “Pilot Program Contribution”.
  • To open a Trump account for an eligible dependent child, new Form 4547 can be e-filed with Form 1040. Form 4547 can also be paper filed if so desired.

The IRS has announced that once the Treasury Department verifies that a Trump account was opened, the $1,000 of “seed money” for children born in 2025 will hit the accounts sometime after July 4, 2026. Michael and Susan Dell announced in December that they will personally be donating $6.25 billion to fund Trump accounts – $250 for 25 million children under age 11 in lower-income areas with median family income of $150,000 or less. Various large companies including Bank of America, Charles Schwab, Comcast, IBM, JPMorgan Chase and Wells Fargo have announced they will match the $1,000 contribution for the children of their employees.

Additional information can be found at www.trumpaccounts.gov.

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