Comments on the initial guidance are due by February 20, 2026.

This insight summarizes the rules that apply to the Accounts. It does not address reporting and other details provided in the initial guidance.

Background on Trump Accounts

The Accounts were created by the One Big Beautiful Bill (OB3) Act, which added Section 530A to the Internal Revenue Code (IRC).

An Account is similar to a traditional individual retirement account (IRA) for children younger than age 18. The Accounts can receive contributions from five sources (discussed below) in addition to the federal pilot program contribution. The Accounts may be funded as a new employment-based benefit or as part of a cafeteria plan.

Generally, when the child is age 18 the Account converts to a traditional IRA and all the traditional IRA rules apply.

The initial guidance on Trump Accounts

The guidance, which was published on December 2, 2026 as Notice 2025-68, covers rules for establishing an Account, making contributions, distributions and investments.

On December 17, 2025, the Treasury provided additional information about the Accounts on new governmental website: trumpaccounts.gov.

Rules for establishing an Account

An Account may be set up on a child’s behalf by a parent or another close relative. The child must be a U.S. citizen and have a Social Security number before the Account is established. The Account must be established before the first day of the calendar year in which the child turns 18.

It appears that Accounts may be established starting in March 2026, but no contributions may be made until July 4, 2026.

The Treasury will designate one or more financial institutions to receive initial contributions.

Any time after the initial setup, an Account may be moved (but only in its entirety) by way of a trustee-to-trustee transfer to another Account of another financial institution that is a bank or qualifies as a non-bank trustee (essentially institutions that are permitted to trustee IRAs).

Rules for making contributions to an Account

There are five types of contributions that may go into an Account during a “growth period,” which is considered the period between when the Account is established and January 1 of the calendar year in which the Account beneficiary attains age 18:

1. Pilot program contributions. The OB3 Act authorizes a federal pilot program contribution of $1,000 to the Account of any child born in 2025, 2026, 2027 or 2028. This one-time contribution will be made starting July 4, 2026.
2. Qualified general contributions. This is a contribution funded by states (or political subdivisions thereof), the U.S., the District of Columbia, Indian tribal governments or Section 501(c)(3) tax-exempt organizations. There is no dollar limit on the total amount of qualified general contributions.

   The Michael & Susan Dell Foundation will make a $250 contribution for any child age 10 or under who is a citizen and not eligible for the federal pilot program contribution if they live in a zip code with median income below $150,000. This $6.25 billion charitable contribution will pass through Treasury to the Accounts. (For more information, see the White House FAQs.)

3. Section 128 employer contributions. The OB3 Act added a new Section 128 to the IRC to allow employers to make contributions of up to $2,500 per employee per year to the children of their employees. The limit, which will increase by a cost-of-living index starting in 2028, is for each employee, not for each child. This contribution is not taxable to the employee or to the child.

   Instead of making a non-taxable contribution directly, an employer could provide that the contribution may be elected by an employee as a salary reduction under a cafeteria plan. Section 128 contributions will be tested under rules similar to those under IRC Section 129 (dependent care).

4. Contributions from other sources. These are contributions from people such as parents, the child and other relatives. The sum of these contributions and the employer contributions may not exceed $5,000 (indexed starting in 2028) per child for any year.
5. Qualified rollover contributions. A person may only have one Account at any time. Thus, if the Account is to be moved to another financial institution, it must be done as a trustee-to-trustee rollover of all the money in the Account. The old Account is then closed.
   
   

Rules for Account distributions

During the “growth period,” no distributions may be made from the Account, except for:

• Qualified rollover contributions to another Account
• Qualified rollover contributions to an Achieving a Better Life Experience (ABLE) account
• Distributions of excess contributions
• Distributions upon death of the Account beneficiary

After the growth period (i.e., the start of the calendar year during which the Account holder turns 18), the distribution rules for traditional IRAs apply. This includes the 10 percent premature distribution additional tax unless there is an exception.

Rules for Account investments

During the “growth period,” investments are limited to mutual funds or exchange traded funds that track an index of primarily U.S. companies, like the S&P 500^©, (not age-based portfolios) and meet certain characteristics. These include tracking the returns of a qualified index, fees limited to a certain level, having no leverage and other standards established by the Treasury.

Additional guidance is planned

The forthcoming guidance will provide more details on funding and will also address issues such as coordination with Section 125 plans and how nondiscrimination rules, including for salary deferrals, will apply.

Action items for employers

Employers may wish to prepare to answer questions from their employees about the Accounts.

Employers that are considering whether to fund these Accounts may find that there are more effective ways of providing compensation and promoting savings. Employees may be more interested in placing money into a more flexible savings  option, such as a retirement savings account, Health Savings Account or 529 account.

Employers should consult with legal counsel prior to implementing programs related to the Accounts. If they are interested in funding an Account or creating a salary election option under their Section 125 cafeteria plan, they will need to either create a new Section 128 Account document or amend the Section 125 plan, depending on approach.