IRS issues gift-tax safe harbor guidance for Trump accounts

The IRS gave certain Trump Account contributions a gift-tax reporting safe harbor on June 29.

The immediate challenge is the mechanics: who can contribute, when contributions can start, what documentation supports the filing position and when staff should stop short of individualized tax advice.

IRS guidance issued Dec. 2, 2025 bars contributions before July 4, 2026, and allows other persons to contribute up to an aggregate $5,000 a year, with employer contributions capped at $2,500 of that amount. The notice also bars the accounts generally from being tapped before Jan. 1 of the calendar year in which the child turns 18, and requires the money to be invested in certain mutual funds or ETFs tracking the S&P 500 or another index of primarily American equities.

Executives, partners and high-earning employees ask whether Trump Accounts can fit into annual exclusion planning for children or grandchildren. Employees in company relocation programs ask mobility teams whether an employer contribution can be layered into a move package. Parents and new hires ask payroll whether a contribution can be handled through compensation processing. Those teams can explain the mechanics, but they should avoid telling anyone whether a specific transfer is a completed gift or whether it is excluded from gift-tax reporting. Private client tax, trusts and estates and family office specialists should handle that question.

The IRS already says the 2026 annual gift-tax exclusion is $19,000, while the basic exclusion amount for estate and gift tax is $15 million for 2026. The American Institute of Certified Public Accountants pressed Treasury and the IRS to clarify that Trump Account contributions should count as completed gifts of a present interest eligible for the annual exclusion.

Treasury’s $1,000 pilot contribution applies to eligible children born in calendar years 2025 through 2028 who are U.S. citizens and have a Social Security number, and the IRS proposed regulations on March 6 laid out the pilot and initial account-opening rules. Taxpayers can now view and submit Trump Account elections in their IRS Individual Account.