On March 31, the IRS announced that taxpayers have already signed up more than 4 million children for Trump accounts, of which more than 1 million children can receive the $1,000 pilot program contribution. IRS Form 4547 is used to elect a Trump account and request the $1,000 pilot contribution.
Trump accounts go live July 4th, and, as with any new program, there are a number of important issues to be addressed about these new IRA accounts for children, particularly following the issuance of Notice 2025-68 and the lengthy comments thereon.
Proposed Regulations
To address some of these issues, the IRS has issued two sets of proposed regulations. These proposed regulations address the establishment of the initial Trump accounts and, separately, the government-funded $1,000 “pilot program” contribution. These proposed rules, summarized below, follow the framework set forth in Notice 2025-68.
New Draft IRS Forms
The IRS has also released draft Forms 5498-TA and 1099-R to address the reporting requirements for the Trump accounts and distributions as follows:
- Form 5498-TA will be used by trustees of Trump Accounts to report contributions each year. The design is similar to the Form 5498 used for traditional and Roth IRAs but includes some elements that are not on those forms. As anticipated, the draft form requires the custodian to separately report contributions in four buckets: (1) the $1000 “pilot” contribution and contributions by states and non-profits (called “qualified general contributions”); (2) rollover contributions; (3) section 128 employer contributions; and (4) all other contributions (which would be the nondeductible contributions made by parents and others). Also, the draft form requires reporting of the basis (i.e. the amount of after-tax contributions), which is not required of traditional IRAs. Finally, the form requires reporting of the fair market value of the account as of the end of the year (just like for IRAs). Notably, the name, TIN, and address on the form is the beneficiary, not the parent or other legal guardian who controls the account.
- Form 1099-R will be used to report distributions from Trump accounts (like with other IRAs). The draft includes a new box 7c, which is checked if the distribution comes from a Trump account, and a new box 7d, which is used to report earnings on excess contributions which are being distributed. The form states that Code G (the rollover code) is to be used to report a direct rollover of the entire balance of a Trump account to an ABLE account of the account beneficiary in the year the beneficiary reaches age 17.
Pending Future Regulations
Future regulations will address the special contribution, investment, distribution, and reporting requirements that apply to Trump accounts and provide guidance to employers that wish to establish Trump account contribution programs under Internal Revenue Code section 128. Code section 128 allows employers to match the $1,000 pilot contributions (and more) for their employees and allow employees to make pre-tax payroll contributions (“128 Programs”). Notably, the IRS has revised the 2026 Form W-2 to reflect the special reporting for 128 Program contributions (new Code “TA” must be used in Box 12).
GROOM INSIGHT: The only way for an employee to fund a Trump account with pre-tax dollars is through an employer’s cafeteria plan – there is no opportunity for an employee (or any other individual) to take an income tax deduction for amounts contributed to a Trump accounts. Of course, employers can make deductible contributions (up to $2,500, indexed) on behalf of their employees’ children that are tax-free to the employees.
Proposed Regulations: Opening Trump Accounts and Electing Pilot Program Contributions
Trump Accounts – General Requirements (New Code section 530A)
The proposed regulations addressing the general requirements for Trump accounts focus on the mechanics of opening the initial Trump account and provide important definitions. These rules are anticipated to affect 73 million children in 44 million families.
- Type of IRA and Other Requirements. A Trump account is limited to a traditional custodial account or trust account under Code section 408(a). It does not include an annuity under Code section 408(b), Roth IRA, SEP IRA, or SIMPLE IRA. The IRA must be titled as a “Trump Account,” and the written IRA document must clearly designate the account as a “Trump Account” at the time of establishment.
A Trump account beneficiary (i.e., the child) may only have one Trump account at a time. Therefore, any rollover Trump account for that beneficiary must be funded with a full transfer of assets from their prior Trump account. The proposed regulations indicate that sample IRA document provisions for rollover Trump accounts are pending.
- IRA Trustee/Custodian. Any person approved by the IRS as of December 31, 2025 to be a nonbank trustee of an IRA has automatic approval to act as custodian/trustee of a Trump account, provided they notify the IRS in writing. All other persons must request IRS approval to act as a Trump account custodian/trustee.
The preamble to the proposed regulations also notes that the IRS is considering changes to the requirements for nonbank trustees and requests comments on issues, such as: (1) whether the net worth test should treat certain debt as equity (e.g., for broker-dealers, debt meeting SEC rule 240.15c3-1 treated as equity); (2) expansion of special governmental unit relief beyond deemed IRAs to cover Trump accounts; and (3) whether the fiduciary experience of subcontractors of the applicant should be taken into account.
- Opening an Account. An “authorized individual” must make an election to open an initial Trump account on or before December 31 of the calendar year in which the account beneficiary attains age 17 and only if that beneficiary is an “eligible individual.”
The authorized individual must make the election via Form 4547 or through the IRS website. The election can be made when the authorized individual files their income tax return, but the election is not part of that tax return and is independent of the tax return filing. Once an election to open an initial Trump account has been made and processed by Treasury, Treasury will not process any additional elections to open an account for that account beneficiary. The IRS website is available now to complete Form 4547 — https://form.trumpaccounts.gov/.
On April 6, 2026, Treasury announced that The Bank Of New York Mellon Corporation (“BNY”) was designated as a financial agent of the U.S. government to manage the initial Trump accounts and help develop the new Trump accounts app. In addition, Treasury selected Robinhood as the initial trustee for Trump accounts. Thus, all Trump accounts will initially be opened with Robinhood.
- No Automatic Enrollment. The preamble to the proposed regulations makes it clear that the authorized individual must make an affirmative election to open a Trump account (and, if the beneficiary is eligible, request a pilot program contribution). There will be no automatic enrollment process by the government to establish accounts, due to various complexities, including impermissible use of tax information. But, the IRS requests comments if a state or other governmental entity could make the election if an authorized individual does not.
- Definitions. The proposed regulations include a number of important definitions:
- “Account beneficiary.” The individual for whose benefit a Trump account was established.
- “Authorized Individual.” The person who is authorized to open an initial Trump account, which includes (1) the person who makes an election for a pilot contribution and opens the initial Trump account at the same time, and (2) if no pilot contribution election is being made, then in the following order of priority: the legal guardian, parent, adult sibling, or grandparent of the eligible individual.
Notably, where multiple individuals have the same priority, any one of them may make the election – the person so electing will be required to represent under penalty of perjury that they are authorized and that no other person with a higher priority is available to make the election. Once Treasury has processed an election to open an initial Trump account for an eligible individual, Treasury will not process any further elections. Pending guidance will address situations where there is no such person (e.g., for foster children or orphans), and the IRS welcomes comments. Lastly, if the person who makes the election is not an authorized individual, Treasury is deemed the authorized individual and the account remains open.
- “Eligible Individual.” Any individual who has (1) not attained age 18 before the end of the calendar year in which the election to open an initial Trump account is made, (2) been issued a SSN before the election is made, and (3) an election made to open an account.
- “Growth Period.” The period that begins when the initial Trump account is established and ends on December 31 of the calendar year in which the account beneficiary attains age 17. This is the period in which the special Trump account rules apply regarding contributions, investments, and distributions.
- “Responsible Party.” Unless state law or the IRA agreement provides otherwise, the default responsible party for the initial Trump account is the individual who makes the election to open the account, and they will have the authority to select investments, make qualified rollover contributions (or an ABLE rollover), and select a successor responsible party for the account while the account beneficiary does not have legal capacity. Applicable law or the IRA agreement will govern when and how a responsible party may be removed and replaced.
These regulations are proposed to be effective beginning January 1, 2026. Comments are due in short order in light of the July 4th rollout – May 6, 2026 (60 days after publication in the Federal Register).
Pilot Program (New Code section 6434)
The proposed regulations addressing the Trump account pilot program focus on the process for making an election to receive the $1,000 government-funded contribution and provide a number of important definitions to facilitate the program. These rules are anticipated to affect 15 million children in 12 million families.
- Tax Treatment. The one-time $1,000 contribution to a Trump account is treated as if the eligible child made a $1,000 payment against an income tax liability that is not due, which is then refunded through a credit to a Trump account. It is not subject to any offsets that would typically apply to a tax refund, and no overpayment interest can accrue prior to January 1, 2028.
- Election Process. The pilot program-electing individual must make an election to receive the $1,000 contribution at any time during the calendar year via Form 4547 or through the IRS website. An election may be made at any time starting on the day that a child becomes eligible and through December 31 of the calendar year that the child attains age 17. The electing individual makes the election when they file their income tax return, but the election is not part of that tax return and is independent of that tax return filing. No subsequent elections will be processed after the first election is processed Importantly, there is no requirement to wait until after the close of the taxable year to make the election – anticipation of meeting the definition of a qualifying child is sufficient.
Definitions. The proposed regulations include a number of important definitions, including:
- “Eligible Child.” An individual (1) who the pilot program-electing individual anticipates will be their qualifying child under Code section 152(c) for the taxable year in which they make the election, (2) who is born after December 31, 2024 and before January 1, 2029, (3) who is a U.S. citizen, (4) to whom a social security number has been issued, and (5) with respect to whom no prior pilot program election has previously been made by any individual and processed by Treasury.
- “Pilot Program-Electing Individual.” An individual who is authorized to make a pilot program election with respect to their eligible child. An individual is so authorized if the eligible child meets the definition of “Eligible Child” with respect to such individual.
These regulations are proposed to be effective beginning January 1, 2026, with the intent to issue final regulations within 18 months of enactment. Comments were due on April 8, 2026 (30 days after publication in the Federal Register).
Conclusion
This first round of proposed regulations sets the stage for Trump accounts, including the $1,000 pilot program funds. Next up we anticipate guidance on how employers can help fund these accounts in tax-favorable ways. Employers have a unique opportunity to fund these accounts – either through deductible employer contributions (that are tax-free to employees) or allowing employees to make pre-tax or after-tax contributions to these accounts. Whether and when employers take advantage of this opportunity will likely turn on the next round of IRS guidance. Stay tuned!
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