IRS Releases First Trump Account Guidance: What CPAs Need to Know for 2026

How Trump Accounts Work

The Treasury and IRS issued Notice 2025-68, outlining contributions, eligible investments, distributions, reporting rules and how these accounts coordinate with traditional IRAs.

A Trump Account can be opened for any eligible child who is a U.S. citizen, is born between Jan. 1 of this year and Dec. 31, 2028, is under age 18 in the year the election is made, and has a valid Form 4547 election. No contributions can be made until July 4 next year.

The $1,000 Federal Pilot Contribution

Every eligible child receives a one-time $1,000 federal contribution. This guidance arrives alongside a $6.25 billion donation from Michael and Susan Dell, which will seed $250 Trump Accounts for 25 million children.

Annual Contribution Rules

The contribution structure is more layered than families expect.

General Contributions

Any individual may contribute up to $5,000 per child per year. This $5,000 limit applies across all contributors combined.

Employer Contributions

Employers may contribute up to $2,500 per year per employee or their dependent. Employer contributions count toward the $5,000 limit but do not count as taxable income to the employee.

Charitable and Government Contributions

Certain charities and government entities may make “qualified general contributions” on top of federal deposits.

Indexing

Contribution limits will adjust for inflation beginning after 2027.

Investment Restrictions: Only U.S. Equity Index Funds

Trump Accounts must be invested in mutual funds or ETFs that track the S&P 500 or a similar broad U.S. equity index. No single stocks, crypto or alternative assets are allowed. These accounts function like IRAs with strict guardrails.

When Funds Can Be Withdrawn

Withdrawals are generally not allowed until the calendar year in which the child turns 18. At that point, the Trump Account automatically converts to a traditional IRA, and standard IRA contribution, distribution and penalty rules apply.

Tax Planning Implications for CPAs

Trump Accounts open a new category of tax planning issues.

Family Contribution Strategy

Parents, grandparents and employers may all want to contribute, requiring CPAs to manage the combined $5,000 limit.

Coordination With Existing IRAs

Families will ask whether Trump Accounts replace or compete with Roth IRAs. They are separate but strategically linked.

Income-Shifting and Early IRA Planning

Once the account becomes a traditional IRA at age 18, CPAs can help clients take advantage of low-income years, penalty exceptions and long-term retirement planning.

Charitable and Corporate Funding Questions

The Dell Foundation’s donation will create widespread confusion about who can fund what and how.

Documentation and Records

CPAs must track federal deposits, employer contributions, charitable contributions, annual statements and Form 4547 elections.

FAQ

Who qualifies for the $1,000 federal contribution
Any eligible child who is a U.S. citizen, born Jan. 1 of this year through Dec. 31, 2028, with a valid election.

Do employer contributions count as taxable income
No. They are excluded from income.

Can families pick any investments
No. Only broad U.S. equity index funds and ETFs are allowed.

Can contributions exceed $5,000 if multiple people give
No. The $5,000 annual limit is combined.

What happens at age 18
The account becomes a traditional IRA.

When do contributions begin
July 4 next year.

Summary

Trump Accounts are shaping up to be one of the most impactful new tax-advantaged vehicles in years. With guidance now released, CPAs should prepare for questions about eligibility, contributions, employer programs, investment restrictions and the conversion to traditional IRAs at age 18. Families see a $1,000 deposit. CPAs see a decade of tax planning.