The U.S. Department of the Treasury and IRS recently issued temporary regulations that provide an immediately effective framework for establishing and administering “Trump Accounts,” including broad automatic enrollment and large-scale contributions funded by governmental and charitable donors. The regulations became effective September 30, 2026, apply to taxable years beginning on or after January 1, 2026, and expire September 30, 2029. Treasury simultaneously issued substantially identical proposed regulations. See T.D. 10056, 91 Fed. Reg. 61705 (Sept. 30, 2026).
What are Trump Accounts?
Established through the “One Big Beautiful Bill” in 2025, a Trump Account is a new type of traditional IRA under Internal Revenue Code Section 530A that gives families the opportunity to contribute to a tax-advantaged account for children at an early age. The accounts are owned by the minor child but managed by a parent or guardian during the child’s minority. At age 18, the account converts to a standard traditional IRA.
Trump Accounts are available for children who have not reached age 18 before the end of the calendar year in which the account election is made and who have been issued a Social Security number. Children who are American citizens (rather than simply having been issued a Social Security number) and who were born between 2025 through 2028 are also eligible for a one-time $1,000 contribution from the United States government. The account’s growth period runs through December 31 of the year the beneficiary turns 17. During that period, distributions generally are prohibited, investments are restricted, and contributions generally are limited to $5,000 annually, with inflation adjustments beginning after 2027.
Key points in the temporary regulations
- Automatic enrollment. On October 1, 2026, the Treasury Department established automatic “auto accounts” for eligible individuals whom Treasury identified and for whom no prior election had been made. Treasury expects to repeat this process periodically. No separate action is required to establish an account.
- Claiming an auto account. A guardian or legal custodian with authority under applicable law, or a beneficiary with legal capacity, may claim an auto account through a Treasury-provided electronic process (i.e., the Trump Accounts mobile app). The claimant must authenticate identity, establish legal authority, and satisfy tax-information consent requirements. During the growth period, the full balance is then transferred trustee-to-trustee to a claimed initial Trump Account or another eligible Trump Account.
- Limited funding of unclaimed auto accounts. Until claimed, an auto account generally may receive only qualified general contributions and an available $1,000 federal pilot-program contribution. Once claimed and activated, the receiving account may accept other permitted contributions, including family and employer contributions.
- Broad-based governmental and charitable contributions. A government, Indian Tribal government, or Section 501(c)(3) organization may request Treasury approval to fund equal contributions for every beneficiary in a qualified class. Treasury and the donor must enter into a Treasury acceptance agreement specifying the funding, covered class, record date, and other terms. An approved class generally must include at least 5,000 beneficiaries and use objective geographic and birth-year criteria.
- Public stock donations. A qualified general contribution may consist of unrestricted, publicly traded stock issued by a domestic corporation. The stock generally must be held until the earlier of five years after contribution or the end of the beneficiary’s growth period, subject to specified exceptions. Improperly disposed shares generally must be repurchased.
- Tax treatment for charitable funding. The regulations confirm that a qualifying contribution to a Section 501(c)(3) organization to fund a general funding contribution may be deductible under Section 170, subject to its ordinary requirements. A charity may make such funding directly or through a donor-advised fund, and doing so is treated as furthering an exempt purpose.
Considerations for Employers, Businesses, and Individuals
Employers should distinguish these temporary regulations from the separate proposed rules under Section 128 governing employer contributions. Qualifying employer contributions may be excluded from an employee’s income up to $2,500 annually, adjusted after 2027, but count toward the general $5,000 annual limit. Employers considering a program should coordinate plan design, payroll administration, nondiscrimination testing, employee communications, and contribution tracking.
Businesses and individuals interested in broad-based giving should note that a general funding contribution must be made by an eligible governmental or Section 501(c)(3) donor and accepted by Treasury. Contributions directed to particular children do not qualify as broad-based qualified general contributions. Families may make other permitted contributions after an account is claimed and activated, but those contributions generally count toward the annual limit and are not deductible as IRA contributions.
Next steps
Treasury expects to release additional information about the request process for general funding contributions, and further guidance will address reporting and other implementation issues. Organizations evaluating employer contributions, charitable funding, qualified stock contributions, or account administration should review the temporary rules together with the separate proposed regulations and forthcoming operational guidance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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