IRS Notice 2025-68 (Dec. 2, 2025); IRS News Release IR-2025-117 (Dec. 2, 2025)
The IRS has announced that it intends to issue proposed regulations regarding Trump Accounts (TAs) and has addressed certain initial questions regarding the establishment and operation of these accounts, including the requirements for employer contributions through Trump Account Contribution Programs (TACPs). TAs are a type of individual retirement account (IRA) that may be established for eligible minors under legislation enacted in July 2025. Contributions to TAs may be made by various sources including employers, which may contribute to the TA of an eligible employee or employee’s dependent through a TACP meeting specified requirements similar to those applicable to DCAPs. Contributions are permitted until the calendar year in which the account beneficiary turns 18.
The guidance confirms that, beginning July 4, 2026, employees may exclude from income employer contributions to a TACP of up to $2,500 (subject to cost-of-living adjustments after 2027) per calendar year. The employer contribution limit applies per employee, not per dependent, so employees with multiple dependents may only receive a total annual employer contribution of $2,500 for all dependents’ TAs. The guidance also clarifies that a TACP may be offered through cafeteria plan salary reductions, so long as the contributions are made to the TA of an employee’s dependent. (Salary reduction contributions to an employee’s own TA are prohibited, as this would be an impermissible deferral of compensation.) The IRS expects to address the coordination of TACPs and cafeteria plans in the forthcoming proposed regulations. Additionally, employers making contributions pursuant to a TACP must notify the TA trustee when the contribution is made that it is a TACP employer contribution and is excludable from the employee’s gross income.
EBIA Comment: Employers interested in offering a TACP benefit now have scaffolding upon which to start building out their programs. For example, employers will want to consider whether to allow funding through cafeteria plan salary reductions, as well as the processes for tracking contributions and communicating the new benefit to employees. Meanwhile, the federal government has established a new website with information about TAs and has issued drafts of IRS Form 4547 (Trump Account Election(s)) and related instructions. For more information, see EBIA’s Fringe Benefits manual at Section XXIV.H (“Trump Account Contribution Programs (TACPs)”) and EBIA’s Cafeteria Plans manual at Section X (“What Benefits Can be Offered Under a Cafeteria Plan?”), both of which will be updated for this development.
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