Employers can contribute to Trump accounts starting next July 

Accounts can begin receiving contributions on July 4, 2026 (i.e., 12 months after the law’s enactment) and can continue receiving contributions through the end of the year when the beneficiary turns 17. Notice 2025-68 refers to this as the “growth period.” Five types of contributions can be made to an account during the growth period:

• A $1,000 federal government contribution under a pilot program for US-citizen children born from 2025 through 2028
• “Qualified general contributions” by the federal government or certain governmental or nonprofit entities to a qualified class of beneficiaries
• “Qualified rollover contributions” from another Trump account
• Employer contributions to the account of an employee’s dependent child under age 18 or the account of an employee who is under 18
• Contributions from any other source (e.g., the beneficiary, their parents or guardians)

Contributions by individuals and employers are subject to an aggregate $5,000 per year contribution limit (indexed for inflation after 2027). The federal government’s $1,000 pilot program contribution, qualified general contributions and qualified rollover contributions don’t count toward the limit. Notice 2025-68 says the trustee is responsible for ensuring aggregate individual and employer contributions don’t exceed the annual limit.

Individuals can’t take a tax deduction for contributions, and contributions aren’t included in the beneficiary’s income when made. Although a Trump account is a type of traditional IRA, beneficiaries needn’t have gross income to receive or make contributions to their account, and contributions don’t count toward the contribution limits on IRAs that aren’t Trump accounts.

During the growth period, the account must be invested in a mutual fund or exchange-traded fund that:

• Tracks the returns of the S&P 500 index or another index consisting of equity investments in primarily US companies for which regulated futures contracts are traded
• Doesn’t use leverage
• Charges annual fees and expenses of 10 basis points or less
• Meets other criteria the Treasury Secretary deems appropriate

Notice 2025-68 says the trustee is responsible for offering only eligible investments as investment options for the account, including monitoring the investments on an ongoing basis to ensure they remain eligible.

The law generally prohibits distributions during the growth period, with exceptions for qualified rollover contributions to another Trump account or an ABLE account, distributions of excess contributions or distributions upon the beneficiary’s death. After the growth period, distributions are generally subject to the rules for traditional IRAs. Distributed amounts are taxable as ordinary income to the extent they’re attributable to pilot program contributions, qualified general contributions, employer contributions and earnings. Individual contributions are considered nontaxable “basis.” The 10% early withdrawal penalty for distributions prior to age 59 1/2 also applies unless the account beneficiary qualifies for one of the exceptions under the ordinary rules for IRA distributions, which include distributions for qualified higher education expenses, qualified birth or adoption expenses and qualified first-time homebuyers.

After the growth period, the beneficiary can transfer their account to another IRA or to an employer-sponsored plan that’s an “eligible retirement plan” under the IRC’s rollover rules. However, a footnote to Notice 2025-68 explains that a Trump account with any nontaxable basis can’t be transferred to a qualified plan, 403(b) plan or governmental 457(b) plan. Notice 2025-68 doesn’t address whether these plans are required to accept transfers from Trump accounts or how plan administrators can ensure the transfer doesn’t include nontaxable basis.

The program also must meet a series of conditions similar to the requirements for dependent care assistance programs (DCAPs) under IRC Section 129(d).

• Nondiscriminatory eligibility classification. The program must benefit employees who qualify under a classification Treasury finds not discriminatory in favor of highly compensated employees (HCEs), as defined in IRC Section 414(q), or their dependents. When applying these rules for DCAPs, sponsors may exclude from consideration employees who haven’t attained age 21 and completed one year of service, as well as certain collectively bargained employees. However, new IRC Section 128 doesn’t expressly incorporate that exclusion for testing Trump account contribution programs. Notice 2025-68 doesn’t provide any guidance on whether the same exclusions can be applied to these programs.
• Employee notification requirements. The statute also incorporates DCAP provisions requiring employers to provide eligible employees with reasonable notification of the availability and terms of the program and furnish each employee, on or before Jan. 31, a written statement showing the amounts paid or expenses incurred by the employer in providing benefits to the employee during the previous calendar year.
• Average benefits test. These programs are also subject to the average benefits test applicable to DCAPs. This test requires the average benefits provided to nonhighly compensated employees to be at least 55% of the average benefits provided to HCEs.